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You've been asked to determine whether to expand your business by building a new manufacturing plant. The plant's installation cost is $15 mil which is
You've been asked to determine whether to expand your business by building a new manufacturing plant. The plant's installation cost is $15 mil which is to be depreciated straight-line over its four year life. The new plant has projected net income over the next four years of $1,754,000; $1,820,500; $1,716,300; and $1,097,000. If the company's AAR hurdle is 20%, should you recommend proceeding with the project?
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