Question: Please Help Urgently pls Question 5 Our refinery has a remaining life of 3 years, and is fully utilised processing 1.5 million barrels of crude

Please Help Urgently pls

Please Help Urgently pls Question 5 Our refinery has a remaining life

Question 5 Our refinery has a remaining life of 3 years, and is fully utilised processing 1.5 million barrels of crude oil per annum at a processing cost of $10.00 real per barrel. By modifying the refinery at a cost of $6 million we can reduce the processing cost to $8.50 real per barrel. We can depreciate this capital cost fully on a straight line basis over the residual 3-year life of the operation. The corporate tax rate is 30%. Should we modify the plant if our real discount rate is 5% and we expect inflation to be 1.75%? Upload your answer to Blackboard

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