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Capitol Health Plans, Inc., is evaluating two different methods for providing home health services to its members. Both methods involve contracting out for services, and

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Capitol Health Plans, Inc., is evaluating two different methods for providing home health services to its members. Both methods involve contracting out for services, and the health outcomes and revenues . not affected lav the method chosen. Therefore, the incremental cash flows for the decision are all outflows. Here are the projected flovvs: 'fear Method A Method B 0 $300,000 $120,000 1 $55,000 $95,000 2 $55,000 $95,000 3 $55,000 $95,000 4 $55,000 $95,000 5 $55,000 $515,000 a. What is each alternative's IRR? b. If the cost of capital for both methods is 9 percent, which method should be chosen? Whv

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