Question: Please answer E Homework: Chapter 11 Homework Question 10, P11-19 (si... Part 1 of 8 HW Score: 92.45%, 14.79 af 16 points O Points: 0

Please answer E Homework: Chapter 11 Homework Question 10, P11-19 (si... PartPlease answer

E Homework: Chapter 11 Homework Question 10, P11-19 (si... Part 1 of 8 HW Score: 92.45%, 14.79 af 16 points O Points: 0 of 1 1 Save Breakeven cash inflows and risk Blair Gases and Chemicals is a supplier of highly purifled gases to semiconductor Manufacturers. A large chip producer has asked Blair to build a new gas production facility close to an existing semiconductor plant. Once the new gas plant is in place, Blair will be the exclusive supplier for that semiconductor fabrication plant for the subsequent 5 years. Blair is considering one of two plant designs. The first is Blair's "standard" plant which will cost $30.2 million to build. The second is for a "custom" plant which will cost $40.1 million to build. The custom plant will allow Blair to produce the highly specialized gases that are required for an emergency semiconductor manufacturing process. Blair estimates that its client will order $9.8 million of product per year if the traditional plant is constructed, but if the customized design is put in place, Blair expects to sell $14.9 million worth of product annually to its client. Blair has enough money to build either type of plant, and, in the absence of risk differences, accepts the project with the highest NPV. The cost of capital is 11.5%. a. Find the NPV for each project. Are the projects acceptable? b. Find the breakeven cash inflow for each project. c c. The firm has estimated the probabilities of achieving various ranges of cash inflows for the two projects, as shown in the table .What is the probability that each project will achieve the breakeven cash inflow found in part (b)? d. Which project is more risky? Which project has the potentially higher NPV? Discuss the risk-rotum trade-offs of the two projects. e. If the firm wished to minimize losses (that is, NPV

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