East Coast needs to analyze a plan to build a new plant in Salisbury Maryland on the Wicomico River for its solar, elect

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East Coast needs to analyze a plan to build a new plant in
Salisbury Maryland on the Wicomico River for its solar, electric
yacht. The plant will require a study by Beacon that costs
$1.2 million.
The new plant will need $45 million immediately and an
additional $40 million in one year. Because it is a
sustainable energy project, the building and equipment can be
depreciated on a 20-year MACRS schedule as a special incentive to
go forward.
Sales Revenues cannot start for 2 years, with $18 million
projected for the 2nd year, $27 million in the 3rd, $35 million in
the 4th, $39 million in the 5th and $43 million in the 6th
year.
Variable Costs are expected to be 55% of sales and fixed costs
are $3.5 million per year. The new plant will require Net
Working Capital of 9 percent.
It is believed that cash flows will grow after year five and
beyond by 4 percent per year. The company tax rate is 21
percent, and the Required Rate of Return is 11 percent
With this information what is the NPV, the Profitability Index,
and the IRR (use the NPV to find the IRR)?
Is the project financially viable? Use screenshots to
support your answer. If the required rate of return is
reduced, how does this impact the decision?