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Business, 12.11.2020 06:00 Lilbre6999

You are considering opening a new plant. • The plant will cost $100 million upfront. After that, it is expected to
produce profits of $30 million at the end of every year. The cash
flows are expected to last forever.
1. Calculate the NPV of this investment opportunity if your cost of
capital is 8%. Should you make the investment?
2. Calculate the IRR and use it to determine the maximum deviation
allowable in the cost of capital estimate to leave the decision
unchanged.

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You are considering opening a new plant. • The plant will cost $100 million upfront. After that, it...
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