An auto plant that costs $60 million to buld can produce a new line of...
90.2K
Verified Solution
Link Copied!
Question
Finance
An auto plant that costs $60 million to buld can produce a new line of cars that will produce net cash flow of $30 million per year If the line is successful, but only $2.5 million per year if it is unsuccessful. You believe that the probability of success is about 70 percent. The auto plant is expected to have a life of 15 years and the opportunity cost of capital is 5 percent. What is the expected net present value of building the plant? Please state your answor in millions and in 2 decimal places. million
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Best
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.