Building a new chemical plan

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Reference no: EM131681002

You are building a new chemical plant. The capital cost of the plant is 100 million dollars. It has a 10 year plant lifetime. Your company has an effective tax rate of 35%, IRR=15%, there is no salvage value at the end of the process, your operating revenue is 100 million per year when plant is at full capacity and your cost of manufacturing is 30 million a year where when plant is at full capacity. Should you build this plant? Please include a small table and figure to show why or why not.

Reference no: EM131681002

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