Engineering, 21.10.2020 16:01 henryzx900
3. A new factory is to be established to produce reinforcement bars for the construction industry. This will require an initial investment of Birr 10 million. It is expected that after three years of operation an additional investment of Birr 5 million will be required; and after six years of operation, another investment of Bill 3 million. Annual operating costs will be Birr 3 million and annual revenues will be Birr 8 million. The life of the plant is 10 years. If the interest rate is 15% per year, compounded annually,
a. what is the NPV of this plant?
b. Is it a worthy investment? Why?
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3. A new factory is to be established to produce reinforcement bars for the construction industry. T...
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