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You are the advisor to the board of trustees of a for-profit university that is considering expanding its current facilities. The board shows you the
You are the advisor to the board of trustees of a for-profit university that is considering expanding its current facilities. The board shows you the graph below that was provided by a consulting firm showing the NPV profile if the current facilities are expanded.
The board has been told by the consulting firm that since the IRR is approximately 9%, the expansion should be undertaken as long as the universitys cost of capital is less than 9%. What would be your recommendation be the board?
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