Question: 1. ABC corp. is adding a new assembly line at a cost of $8.5million. The firm expects the project to generate cash flows of $2

1. ABC corp. is adding a new assembly line at a cost of $8.5million. The firm expects the project to generate cash flows of $2 million. $3 million.$4million,and $5 million over the the next four years. Its cost of capital is 16 percent. What is the net present value of this project?

2. Explain under what circustances the NVP and IRR could provide digfferent decisions.

3. What are the advantage and disadvantages of the net present value technique?

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