1.10. Reexamine the capital investment decision in the disposable diaper industry (Example 15.3) 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 start-up. How does this advantage affect the NPV calculations in Table 15.5 (page 567)? Is the investment profitable at a discount rate of 12 percent?