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2. The DEF Corporation is trying to decide whether to undertake an expansion of its production facilities. The expansion will cost $8.5 million, to be
2. The DEF Corporation is trying to decide whether to undertake an expansion of its production facilities. The expansion will cost $8.5 million, to be paid immediately. After tax cash flows generated by the expansion are projected to be $1 million next year, and will be growing indefinitely with inflation at 2.5% per year. Assume the cost of capital of 12%. Should DEF undertake the expansion? (5 Points)
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