16. Economic rents (S11.3) How would your answer to Problem 15 change if technological improvements reduce the
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16. Economic rents (S11.3) How would your answer to Problem 15 change if technological improvements reduce the cost of new BG production facilities by 3% per year? Thus a new plant built in year 1 would cost only 25 (1 − 0.03) = $24.25 million, a plant built in year 2 would cost $23.52 million, and so on. Assume that production costs per unit remain at $65.
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Principles Of Corporate Finance
ISBN: 9781264080946
14th Edition
Authors: Richard Brealey, Stewart Myers, Franklin Allen, Alex Edmans
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