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Explain expected net present value of building the plant

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An auto plant that costs $75 million to build can produce a new line of cars that will produce net cash flow of $45 million per year if the line is successful, but only $6.5 million per year if it is unsuccessful. You believe that the probability of success is about 30 percent. The auto plant is expected to have a life of 15 years and the opportunity cost of capital is 11 percent.

What is the expected net present value of building the plant?

Reference no: EM132700824

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