Question: PLEASE HELP ME SOLVE THIS QUESTION. TRY TO EXPLAIN ALL THE STEPS. QUESTION 4. Refer to question 2 and 3. The land for the factory

PLEASE HELP ME SOLVE THIS QUESTION. TRY TO EXPLAIN ALL THE STEPS.

QUESTION 4.

Refer to question 2 and 3. The land for the factory will cost $1,010,000. The factory will cost $8,040000 to build and construction will take two years with construction cost payable in equal installments at the start of each year. The factory will operate for 20 years. At the end of its 20 year lifespan, the land can be resold for $630,000.

There is a 70% probability that the factory's net operating cash flows will be $1,132,250; however, there is a 30% chance that net cash flows will only be $694,369. You may assume that net operating cash flows are received at the end of each year.

a.) What are the expected net operating cash flows per year?

b.) What is the Internal Rate of Return for the project?

c.) What is the Net Present Value of the project?

d.) Should Anna recommend that the J Corporation build the factory?

Information from question 2 The risk free rate of return is 1.4% and the market risk premium is 3.6%, Beta of J Corp.'s stock is 1.99 and using CAPM model, expected rate of return on J Corp. stock for the coming year is 8.56%.

Information from question 3 WACC of J Corp. is 8.07%, J Corp.'s tax rate is 30%,

Please give me the solution. If you need more information, I'll edit this question.

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