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Part $1$

You are considering opening a new plant. The plant will cost

$ $100\mathrm{.}0$$$100\mathrm{.}0$

million upfront and will take one year to build. After$$ that, it is expected to produce profits of

$ $30\mathrm{.}0$$$30\mathrm{.}0$

million at the end of every year of production. The cash flows are expected to last forever. Calculate the NPV of this investment opportunity if your cost of capital is

$8\mathrm{.}0\%8\mathrm{.}0\%.$

Should you make the$$ investment? Calculate the IRR. Does the IRR rule agree with the NPV$$ rule?