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Analyze this scenario. What do you recommend based on these results? Explain. (b) Note that the above scenario uses a slightly lower discount rate
Analyze this scenario. What do you recommend based on these results? Explain. (b) Note that the above scenario uses a slightly lower discount rate on Keep Old than Pull Old. The thinking is that Pull Old is a bit riskier since it involves removing from the market a known product." A number of Pinnacle's managers, however, think this interest rate differential is inappropriate. They believe that the same discount rate should be used on Keep Old and Pull Old, either 10 percent or 11 percent. How does all this affect your recommendation in part (a)? Explain. (Keep all other inputs at the values in part (a).)
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