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A company considering two mutually exclusive expansion plans. Plan A requires an 8 million expenditure on a large-scale integrated plant that would provide expected cash
A company considering two mutually exclusive expansion plans. Plan A requires an 8 million expenditure on a large-scale integrated plant that would provide expected cash flows of 3 million per year for 5 years. Plan B requires $4 million expenditure to build a somewhat less efficient more labor-intensive plant with expected cash flows of 1.75 million per year for 5 years. What is the NPV plan of capital is to the crossover rate between A & B?
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