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Should managers be ethical? Consider a project with expected perpetual cash flows of $50,000 per year. The appropriate discount rate is 10%. The company has
Should managers be ethical? Consider a project with expected perpetual cash flows of $50,000 per year. The appropriate discount rate is 10%. The company has a choice of two machines to undertake this project. Machine A costs $400,000. With machine A, the project will leak some minor pollutant to a nearby river. The pollution amount is within legal limits. Alternatively, the company can use Machine B which costs $520,000 but completely seals the leak. What should the company do? Undertake the project or not? With which machine
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