You are considering opening a new plant. The plant will cost $99.5 million up front and will take one year to build.

Please show all work and how to input it into a fin calculator

You are considering opening a new plant. The plant will cost $99.5 million up front and will take one year to build. After that it is expected to produce profits of$28.9 million at the end of every year of production. The cash flows are expected to last forever. Calculate the NPV of this investment opportunity if your cost of capital is 8.2%.

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.

Expert Solution

ekkarill92 answered 2 years ago

You are considering opening a new plant. The plant will cost $101.8 million up front and will take one year to build.

You are considering opening a new plant. The plant will cost $101.8 million up front and will take one year to build. After that it is expected to produce profits of $30.9 million at the end of every year of production. The cash flows are expected to last forever. Calculate the NPV of this investment opportunity if your cost of capital is 7.8%.Should you make the investment? Calculate the IRR and use it to determine the maximum deviation allowable in...

You are considering opening a new plant. The plant will cost $103.9 million up front and...

You are considering opening a new plant. The plant will cost $103.9 million up front and will take one year to build. After that it is expected to produce profits of $30.4 million at the end of every year of production. The cash flows are expected to last forever. Calculate the NPV of this investment opportunity if your cost of capital is 7.5%. Should you make the investment? Calculate the IRR and use it to determine the maximum deviation allowable...

You are considering opening a new plant. The plant will cost $97.9 million up front and...

You are considering opening a new plant. The plant will cost $97.9 million up front and will take one year to build. After that it is expected to produce profits of $30.4 million at the end of every year of production. The cash flows are expected to last forever. Calculate the NPV of this investment opportunity if your cost of capital is 7.8%. Should you make the investment? Calculate the IRR and use it to determine the maximum deviation allowable...

You are considering opening a new plant. The plant will cost $ 95.5 million up front...

You are considering opening a new plant. The plant will cost $ 95.5 million up front and will take one year to build. After that it is expected to produce profits of $ 28.4 million at the end of every year of production. The cash flows are expected to last forever. Calculate the NPV of this investment opportunity if your cost of capital is 8.5 %. Should you make the? investment? Calculate the IRR and use it to determine the...

You are considering opening a new plant. The plant will cost $ 96.2 million up front...

You are considering opening a new plant. The plant will cost $ 96.2 million up front and will take one year to build. After that it is expected to produce profits of $ 29.6 million at the end of every year of production. The cash flows are expected to last forever. Calculate the NPV of this investment opportunity if your cost of capital is 8.2 % Should you make the investment? Calculate the IRR and use it to determine the...

You are considering making a movie. The movie is expected to cost $10.2 million up front...

You are considering making a movie. The movie is expected to cost $10.2 million up front and take a year to produce. After that, it is expected to make $4.6 million in the year it is released and $1.7 million for the following four years. What is the payback period of this investment? If you require a payback period of two years, will you make the movie? Does the movie have positive NPV if the cost of capital is 10.5%?...

You are considering making a movie. The movie is expected to cost $10.7 million up front...

You are considering making a movie. The movie is expected to cost $10.7 million up front and take a year to produce. After that, it is expected to make $4.9 million in the year it is released and $1.7 million for the following four years. What is the payback period of this investment? If you require a payback period of two years, will you make the movie? Does the movie have positive NPV if the cost of capital is 10.3%?...

You are considering making a movie. The movie is expected to cost $10.8 million up front...

You are considering making a movie. The movie is expected to cost $10.8 million up front and take a year to produce. After? that, it is expected to make $4.1 million in the year it is released and $1.7 million for the following four years.a) What is the payback period of this? investment?b) If you require a payback period of two? years, will you make the? movie? Does the movie have positive NPV if the cost of capital is 10.6%??npv...

You are considering making a movie. The movie is expected to cost $10.6 million up front...

You are considering making a movie. The movie is expected to cost $10.6 million up front and take a year to produce. After that, it is expected to make $4.9 million in the year it is released and $1.7 million for the following four years. What is the payback period of this investment? If you require a payback period of two years, will you make the movie? Does the movie have positive NPV if the cost of capital is 10.3%?

You are considering making a movie. The movie is expected to cost $10.1 million up front...

You are considering making a movie. The movie is expected to cost $10.1 million up front and take a year to produce. After that, it is expected to make $4.1 million in the year it is released and $1.9 million for the following four years. What is the payback period of this investment? If you require a payback period of two years, will you make the movie? Does the movie have positive NPV if the cost of capital is 10.1%?

Question