Conditions should facility be expanded immediately

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1. Rowling manufacturing is considering building a new factory to produce aluminium cans. This project will require an initial cash outlay of $8,000,000 and will generate annual net cash inflows of $2,000,000 per year for six years. Using the financial calculator in spread sheet calculate the project's NPV for each of the following discount tates:

a) 9%

b) 11%

c) 13%

d) 15%

2. Under which of the following conditions should a facility be expanded immediately? (It can be multiple answers)

A. Only the effective utilization rate is greater than 1.

B. Only the effective utilization rate is less than 1.

C. Only the design utilization rate is greater than 1.

D. Both design and effective utilization rates are greater than 1.

E. Both design and effective utilization rates are less than 1.

F. Only the design ultilization rate is less than 1.

Reference no: EM131861349

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