Separableincrement of investment

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A firm must decide which of three alternatives to adopt to expand its capacity. The firm wishes a minimum annual profit of 20% of the initial cost of each separableincrement of investment. Any money not invested in capacity expansion can be invested elsewhere for an annual yield of 20% of initial cost.

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Which alternative should be selected? Use a challenger-defender rate of return analysis.

Reference no: EM131808980

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