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battery manufacturing company. In the production of solar panels and batteries, toxic chemical waste is generated, and proper disposal is very expensive. A recently hired
battery manufacturing company. In the production of solar panels and batteries, toxic chemical waste is generated, and proper disposal is very expensive. A recently hired engineer has presented a project to you, code-named "Stealth Disposal" (SD). SD involves constructing underground chambers for the disposal of toxic waste. Due to the remote location of your company, it is unlikely that regulators would discover this unconventional disposal method. The engineer estimates that there is a less than 25% chance of the waste leaking into the groundwater, which is used as drinking water by the nearest city. While there is an upfront cost associated with constructing SD, the projected cost savings compared to normal disposal methods over the next 10 years appear to be significant. This could have an extremely positive impact on your performance bonus each year for the next decade. However, after 10 years, the SD site would be full, and alternative disposal methods would need to be considered. What considerations are important for your decision to accept or reject SD? How might this tie into the principal-agent problem? Report : 1- 2 pages (please submit your report
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