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7--Bita overseas company is working on expansion decision, assume that the company is having 3 different alternates of investment, to invest in plant A, the
7--Bita overseas company is working on expansion decision, assume that the company is having 3 different alternates of investment, to invest in plant A, the cost of initial investment (outflow) is $100000 and the expected returns (inflow ) $ 40000 per year for 4 years that are shown in the table below , OR to invest in plant B, the cost of initial investment (outflow) is $200000 and the expected returns (inflow ) $ 50000 per year for 4 years , OR to invest in plant C, the cost of initial investment (outflow) is $150000 and the expected returns (inflow ) $ 35000 per year for 4 years that are shown in the table below that are shown in the table below....... (3 marks) REQUIRED Which ALTERNATE would the management choose. Giving the following table: Year Investments 1 2 Plant A 100,000 40 40 40 40 Plant B 200,000 50 50 50 50 Plant C 150,000 35 35 35 35 3 4
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