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Your firm is considering buying a truck to make deliveries. If they buy the less expensive truck, the expected NPV will be higher than if
Your firm is considering buying a truck to make deliveries. If they buy the less expensive truck, the expected NPV will be higher than if they buy the more expensive option, however, the risk of breakdowns disrupting sales was not considered in the estimation of the two truck alternatives' NPVs. How should the added risk associated with the less expensive truck be incorporated into the estimation of its NPV? Explain.
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