Question: See Question in attached picture. Solutions needed for The Project NPV table shown in the picture based on the solutios provided.An auto plant that costs
See Question in attached picture. Solutions needed for The Project NPV table shown in the picture based on the solutios provided.An auto plant that costs $ million to build can produce a line of flexfuel cars that will
produce cash flows with a present value of $ million if the line is successful but only $
million if it is unsuccessful. You believe that the probability of success is only about You
will learn whether the line is successful immediately after building the plant.
a Calculate the expected NPV
Note: Do not round intermediate calculations. A negative amount should be indicated by
a minus sign. Enter your answers in millions rounded to decimal place.
a Would you build the plant?
Suppose that the plant can be sold for $ million to another automaker if the auto line is
not successful.
b Calculate the expected NPV
Note: Do not round intermediate calculations. A negative amount should be indicated by
a minus sign. Enter your answers in millions rounded to decimal place.
b Would you build the plant?
Answer is complete but not entirely correct.
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