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Question 4: HELP
Refer to Questions 2 and 3. The land for the factory will cost $290,000. The factory will cost $6,440,000 to build and construction will take two years with construction costs payable in equal installments at the start of each year.. The factory will operate for 20 years; however, at the end of the fifth, tenth, and fifteenth year of operation, refurbishment costs will be $440,000. At the end of its 20 year lifespan, the land can be resold for $310,000. There is a 70% probability that the factory's net operating cash flows will be $675,162 however, there is a 30% chance that net cash flows will only be $413,362. You may assume that net operating cash flows flow at the end of each year.
a) What are the Expected net operating cash flows per year? (Round your answer to 2 decimal places)
b) What is the Internal Rate of Return for the project? (Round your answer to one one-hundredth of a percent)
c) What is the Net Present Value of the project? Round your answer to 2 decimal places)
d) Should Anna recommend that the J Corporation build the factory?
Cost of LandCost of factoryRefurbishment costLifeResale value of land 290000644000044000020310000 Probability OCF70%30% Calculating the expcted cash flowExpected cash flow === 675162...