You are considering opening a new plant. The plant will cost $95.8 million upfront. After that, it
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You are considering opening a new plant. The plant will cost $95.8 million upfront. After that, it is expected to produce profits of $31.5 million at the end of every year. The cash flows are expected to last forever. Calculate the NPV of this investment opportunity if your cost of capital is 7.4%. Should you make the investment? Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged.
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Related Book For
Corporate Finance The Core
ISBN: 9781292158334
4th Global Edition
Authors: Jonathan Berk, Peter DeMarzo
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