Reexamine the capital investment decision in the disposable diaper industry (Example 15.4) from the point of view

Question:

Reexamine the capital investment decision in the disposable diaper industry (Example 15.4) from the point of view of an incumbent firm. If P&G or Kimberly-Clark were to expand capacity by building three new plants, they would not need to spend $60 million on R&D before startup. How does this advantage affect the NPV calculations in Table 15.5 (page 577)? Is the investment profitable at a of 12%?
Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...