This is a project of medium expense. The risk of this project is very low, as nothing much can happen. The project has an IRR of 15%. It is also well within the required level to keep the investment discount rate at the 12% mark. The project should be undertaken. It is possible that other insurance costs can be saved as well, as the new setup will make the plant saver. At a 10% discount rate, the project would have an NPV of $ 688,092. If the discount rate were to go up to 12%, this NPV would go down to $ 372,551. It is recommended that this project be accepted.
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