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5. Consider the three plans offered to the regional Bell operating companies: 1. PCR with X = 5.4%, 2. PCR with X = 4% and

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5. Consider the three plans offered to the regional Bell operating companies: 1. PCR with X = 5.4%, 2. PCR with X = 4% and a maximum rate of return of 12.25%, 3. PCR with X = 4.6% and a maximum rate of return of 13.25%. Which plan would a firm that expects a small cost reduction take? Explain

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