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13. PU Inc. is planning to build a new plant in either Ohio or Pennsylvania. Because the management of PU Inc. is unfamiliar with the

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13. PU Inc. is planning to build a new plant in either Ohio or Pennsylvania. Because the management of PU Inc. is unfamiliar with the local labor market in Pennsylvania, it paid WeKnow Consulting Inc. $0.25m to provide a thorough report on the local labor market around the planned plant site. After reviewing the report, the management of PU Inc. expects to pay $10m to build the plant in either Pennsylvania or Ohio in year zero, and annual labor costs of $0.1m in Ohio and $0.09m in Pennsylvania for the twenty year life time of the plant during which is generates sales of $2m annually. Assuming its cost of capital is 18.4%, should PU Inc, build one of the plants and if so where

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