BusinessFinanceQ&A LibraryA proposed nuclear power plant will cost $2.7 billion to build and then will produce cash flows of $350 million a year for 15 years. After that period (in year 15), it must be decommissioned at a cost of $950 million. a. What is the NPV of the project if the discount rate is 3%? b. What is the NPV of the project if the discount rate is 16%?

Question

A proposed nuclear power plant will cost $2.7 billion to build and then will produce cash flows of $350 million a year for 15 years. After that period (in year 15), it must be decommissioned at a cost of $950 million.

**a. **What is the NPV of the project if the discount rate is 3%?

**b. **What is the NPV of the project if the discount rate is 16%?

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