A proposed nuclear power plant will cost $2.9 billion to build and then will produce cash flows of $370 million a year for 15 years. After that period (in year 15), it must be decommissioned at a cost of $970 million. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers in billions rounded to 3 decimal places.)   a. What is project NPV if the discount rate is 4%?         b. What if the discount rate is 16%?

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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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A proposed nuclear power plant will cost $2.9 billion to build and then will produce cash flows of $370 million a year for 15 years. After that period (in year 15), it must be decommissioned at a cost of $970 million. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers in billions rounded to 3 decimal places.)

 

a. What is project NPV if the discount rate is 4%?

 

 

 

 

b. What if the discount rate is 16%?

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