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You are the head of LA Port Authority debating an expansion to accept 1 0 % more cargo per day. The expansion will cost $
You are the head of LA Port Authority debating an expansion to accept more cargo per day.
The expansion will cost $ and result in annual cost savings of $ alongside
revenues of $ The expansion will operate for ten years before needing replacement.
You can currently obtain subsidized funding from the FTA at
a Based on the NPV rule, should you pursue the project?
b Based on the IRR rule, should you pursue the project?
c If your CEO requires a payback of years, should you pursue the project?
d Should you pursue the project if your CEO requires a discounted payback of years?
e Should you accept the project based on the profitability index?
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