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The Pinkerton Publishing Company is considering two mutually exclusive expansion plans. Plan A calls for the expenditure of $ 5 0 million on a large
The Pinkerton Publishing Company is considering two mutually exclusive expansion plans. Plan A calls for the expenditure of $ million on a largescale, integrated plant that will provide an expected cash flow stream of $ million per year for years. Plan B calls for the expenditure of $ million to build a somewhat less efficient, more laborintensive plant that has an expected cash flow stream of $ million per year for years. The firm's cost of capital is
a Calculate each projects NPV and IRR.
B Graph NPV profiles for plan A Plan B
C Find the crossover rate
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