Calculate the expected NPV

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Reference no: EM131088145

An auto plant that costs $200 million to build can produce a line of flexfuel cars that will produce cash flows with a present value of $260 million if the line is successful but only $120 million if it is unsuccessful. You believe that the probability of success is only about 45%. You learn whether the line is successful immediately after building the plant. a-1. Calculate the expected NPV.(Negative amount should be indicated by a minus sign. Enter your answer in millions rounded to 2 decimal places.) Expected NPV $_____million a-2. Would you build the plant? Yes No Suppose that the plant can be sold for $170 million to another automaker if the auto line is not successful. b-1. Calculate the expected NPV.(Negative amount should be indicated by a minus sign. Enter your answer in millions rounded to 2 decimal places.) Expected NPV $____million b-2. Would you build the plant? Yes No

Reference no: EM131088145

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