You are helping a manufacturing firm decide whether it should invest in a new plant. The initial investment is expected to be $ 50 million, and the plant is expected to generate after-tax cashflows of $ 5 million a year for the next 20 years. There will be an additional investment of $ 20 million needed to upgrade the plant in 10 years. If the discount rate is 10%,
a. Estimate the Net Present Value of the project.
b. Prepare a Net Present Value Profile for this project.
c. Estimate the Internal Rate of Return for this project. Is there any aspect of the cashflows that may prove to be a problem for calculating IRR?