A university professor has recently published a journal article that could lead to a new manufacturing process for Basic. The A Chemical Company has tested the new process, and the management is convinced that the variable costs could be reduced from $ 1 5 0 per ton to $ 5 0 per ton. The minimum capacity for the new process is 3 million tons per year, and the new process would cost $ 6 0 0 million. The A Chemical Company has a large tax - loss carryover and is not likely to be paying income taxes in the foreseeable future. The A Chemical Company and Nisson have been competing for a number of years, and, given similar cost structures, they have avoided any extreme forms of price competition. The $ 50 incremental profit per ton is deemed to be a fair return on the capital currently being employed. The A Chemical Company has been borrowing long - term funds at a cost of 0.14 and has computed its weighted average cost of capital to be 0.20 . It knows that Nisson uses 0.10 . The A Chemical Company has been using 0.20 as a hurdle rate to evaluate efficiency - increasing investments in any mature activities with little chance of growth. There is reason to think that there will be no new significant cost - saving developments in the future and that the demand for the product will stay constant at 2 million tons per year if the price of $ 200 per ton is not changed. The physical life of the investment is extremely long. It is reasonable to assume that the equipment will have an infinite life. Question: create a NPV analysis for company A