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8-9 (similar to) Question Help You are considering opening a new plant. The plant will cost 597 2 million up front and will take one year to build. After that it is expected to produce profits of 531. 1 million at the end of every year of production. The cash flows are axpected to last forever Calculate the NPV of this investment opportunity if your cost of capital is 8.3% 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 The NPV of the project will be 5 million (Round to one decimal place) P 8-10 (similar to) Question Help Bill Clinton reportedly was paid $15.0 million to write his book My Life. The book took three years to write. In the time he spent writing, Clinton could have been paid to make speeches. Given his popularity, assume that he could eam 58.7 million per year (paid at the end of the year) speaking instead of writing. Assume his cost of capital is 9.6% per year. a. What is the NPV of agreeing to write the book (ignoring any royalty payments)? b. Assume that once the book is finished, it is expected to generate royalties of $4.7 million in the first year (paid at the end of the year) and these royalties are expected to decrease at a rate of 30% per year in perpetuity What is the NPV of the book with the royalty payments? a. What is the NPV of agreeing to write the book (ignoring any royalty payments)? The NPV of agreeing to write the book (ignoring any royalty payments) is $ (Round to the nearest dollar)