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e Pinkerton Publishing Company is considering two mutually exclusive expansion plans. Plan A calls for the expenditure of $56 million on a large-scale, integrated plant
e Pinkerton Publishing Company is considering two mutually exclusive expansion plans. Plan A calls for the expenditure of $56 million on a large-scale, integrated plant that will ovide an expected cash flow stream of $9 million per year for 20 years. Plan B calls for the expenditure of $12 million to build a somewhat less efficient, more labor-intensive plant at has an expected cash flow stream of $3.8 million per year for 20 years. The firm's cost of capital is 11%. a. Calculate each project's NPV. Do not round intermediate calculations. Round your answers to the nearest dollar. Project A:$ Project B: $ Calculate each project's IRR. Round your answers to two decimal places. Project A: % Project B: % b. Set up a Project by showing the cash flows that will exist if the firm goes with the large plant rather than the smaller plant. Round your answers to the nearest dollar. Use a minus sign to enter cash outflows, if any. What is the NPV for this Project ? Do not round intermediate calculations. Round your answer to the nearest dollar. Use a minus sign to enter negative value, if any. $ What is the IRR for this Project ? Round your answer to two decimal places. % c. Select the correct graph for the NPV profiles for Plan A, Plan B, and Project . A The correct graph is
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