I ONLY NEED PARTS B AND C DONE ON THIS WITH A HELPFUL EXPLANATION - PLEASE SHOW

Question

I ONLY NEED PARTS B AND C DONE ON THIS WITH A HELPFUL EXPLANATION - PLEASE SHOW YOUR WORK AND EXPLAIN IT

The Delta Publishing Company is considering two mutually exclusive expansion plans. Plan Alpha calls for the expenditure of $50 million on a large-scale, integrated plant that will provide an expected cash flow stream of $8 million per year for 20 years. Plan Beta calls for the expenditure of $15 million to build a somewhat less efficient, more labor-intensive plant that has an expected cash flow stream of $3.4 million per year for 20 years. The firm

Explanation / Answer

IRR = 15.02% ( By trial and error method)

c)

Year Cashflows PV@10% 0 -50       -50.00 1 8           7.27 2 8           6.61 3 8           6.01 4 8           5.46 5 8           4.97 6 8           4.52 7 8           4.11 8 8           3.73 9 8           3.39 10 8           3.08 11 8           2.80 12 8           2.55 13 8           2.32 14 8           2.11 15 8           1.92 16 8           1.74 17 8           1.58 18 8           1.44 19 8           1.31 20 8           1.19 NPV         18.11

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.