How to calculate the expected npv

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An auto plant that costs $160 million to build can produce a line of flexfuel cars that will produce cash flows with a present value of $250 million if the line is successful but only $60 million if it is unsuccessful. You believe that the probability of success is only about 52%. You will learn whether the line is successful immediately after building the plant.

Question 1: Calculate the expected NPV. (Do not round intermediate calculations. A negative amount should be indicated by a minus sign. Enter your answers in millions rounded to 1 decimal place.)

Question 2: Would you build the plant?

Reference no: EM132578444

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