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Suppose a firm is contemplating investing ina new distribution network to distribute over the counter drugs to pharmacies around the world. Also, suppose that the

Suppose a firm is contemplating investing ina new distribution network to distribute over the counter drugs to pharmacies around the world. Also, suppose that the investments and cash flows from creating this distribution network are as depicted in a panel A of the following table. Finally, suppose that this distribution network, with some additional investment, could also be used to distribute prescriptions drugs, and the investments and cash flows of this second investment are as depicted in Abel B. Assume that the discount rate for these two investments is 13%.

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