Question: You are helping a manufacturing firm decide whether it should invest in a new plant. The initial investment is expected to be $50 million, and

You are helping a manufacturing firm decide whether it should invest in a new plant. The initial investment is expected to be $50 million, and the plant is expected to generate after-tax cash flows of $5 million a year for the next twenty years. There will be an additional investment of $20 million needed to upgrade the plant in ten years.
If the discount rate is 10%,
a. Estimate the NPV of the project.
b. Prepare an NPV Profile for this project.
c. Estimate the IRR forth is project. Is there any aspect of the cash flows that may prove to be a problem for calculating IRR?

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