Posted by Anonymous on Tuesday, July 20, 2010 at 3:46am.
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. Calculate the NPV of this investment opportunity if your cost of capital is 8%. Should you make the investment? Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged.

Finance  Anonymous, Sunday, October 9, 2016 at 9:17pm
npv=(1/1+r)*(c/r)c0
1/1,08*30/0.08100
answer: 247.22

Finance  diego, Sunday, October 9, 2016 at 9:17pm
npv=(1/1+r)*(c/r)c0
1/1,08*30/0.08100
answer: 247.22
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