Lincoln Coal is planning a new plant. The plant will cost €430,000 to build in year 0. It will earn €200,000 at the end
Posted: Wed May 18, 2022 10:09 pm
Lincoln Coal is planning a new plant. The plant will cost
€430,000 to build in year 0. It will earn €200,000 at the end of
each year, from year 1 to year 7. When production stops, the plant
will be closed with a total estimated closure cost of €170,000.
Lincoln's cost of capital is estimated at 16%.
a) What is the NPV of this project?
b) What is the discounted payback period?
€430,000 to build in year 0. It will earn €200,000 at the end of
each year, from year 1 to year 7. When production stops, the plant
will be closed with a total estimated closure cost of €170,000.
Lincoln's cost of capital is estimated at 16%.
a) What is the NPV of this project?
b) What is the discounted payback period?