Question: I have no idea how to get the second answer 157.18. Please write down the details calculation, don't use excel. Thank you! An auto plant

 I have no idea how to get the second answer 157.18.

I have no idea how to get the second answer 157.18. Please write down the details calculation, don't use excel. Thank you!

An auto plant that costs $85 million to build can produce a new line of cars that will produce net cash flow of $35 million per year if the line is successful, but only $4.5 million per year if it is unsuccessful. You believe that the probability of success is about 50 percent. The auto plant is expected to have a life of 26 years and the opportunity cost of capital is 8 percent. What is the expected net present value of building the plant? Please state your answer in millions and in 2 decimal places. Number Correct response: 128.50.02 million If the plant could be sold for $110 million to another automaker in one year if the auto line is not successful, what is the expected net present value of building the plant? Please state your answer in millions and in 2 decimal places. Number Correct response: 157.18 0.02million

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