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GM is thinking of adding bicycles to their production. GM currently has a Beta of 1.6 and an alpha of -.03. Other bicycle manufacturers have

GM is thinking of adding bicycles to their production. GM currently has a Beta of 1.6 and an alpha of -.03. Other bicycle manufacturers have a Beta of .8. The risk-free rate is 1%, and the expected return to the market is 8%. If opening the bicycle plant would cost $2 million and produce cash flows of $190,000/yr going forever, should GM open the bicycle plant?

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