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Suppose you have been hired as a financial consultant to defense electronics, Inc., a large, publicly traded firm that is the market share leader in

Suppose you have been hired as a financial consultant to defense electronics, Inc., a large, publicly traded firm that is the market share leader in radar detection systems. The company is looking at setting up a manufacturing plant overseas to produce a new line of RDS is. This will be a five-year project. The company bought some land three years ago for $7.2 million in anticipation of using it as a toxic dump site for waste chemicals, but it built a piping system to safely. Discard the chemicals instead. If the land were sold today, the net proceeds would be $7.65 million after taxes. In five years, the land will be worth $7.95 million after taxes.The company wants to build its new manufacturing plant on this land, the plant will cost $13.2 million to build. The following market data on DEI security are current.
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