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You own factory A and factory B. The next cash flow for each factory is expected in 1 year. Factory A has a cost of
You own factory A and factory B. The next cash flow for each factory is expected in 1 year. Factory A has a cost of capital of 3.5 percent and is expected to produce annual cash flows of $19.800 forever. Factory B is worth $545.000 and is expected to produce annual cash flows of $18.400 forever. Which assertion is true? 3. Factory Als more valuable than factory B and factory As more risky than factory b. Factory A is more valuable than factory and factory is more risky than factory c. Factory B is more valuable than factory A and factory Ais more risky than factory B d. Factory is more valuable than factory A and factory B is more risky than factory A e. Factory A and factory Bether have the same value the same level of risk or both the same value and level of risk
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