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Question (Category: business homework)
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. div

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