Question
Your division is considering a new production plant which requires an up-front expenditure of $32 million. What are the NPV and IRR of the new
Your division is considering a new production plant which requires an up-front expenditure of $32 million. What are the NPV and IRR of the new plant? You estimate that the cost of capital is 6% and that the investments will produce the following after-tax cash flows:
| Year | Cash Flows | (millions) |
| 1 | $5 | |
| 2 | $10 | |
| 3 | $10 | |
| 4 | $15 | |
| 5 | $15 | |
| 6 | $20 |
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Fundamentals Of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
16th Edition
0357517571, 978-0357517574
