You are considering opening a new plant. The plant will cost $96 million upfront. After that, it is expected to produce constant profits at the end of every year (the first profits arrive at t=1). The cash flows are expected to last forever. The discount rate is 7%.

At what profits amount would you breakeven in the plant investment?

Answer rating: 100% (QA)

SOLUTION To calculate the breakeven profits amount for the plant investment we need to determine the point at which the present value of the expected ... View the full answer