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*30/0.08-100

answer: 247.22

- Finance -
**diego**, Sunday, October 9, 2016 at 9:17pm
npv=(1/1+r)*(c/r)-c0

1/1,08*30/0.08-100

answer: 247.22

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