Expand Test Center a at the End of Year 0

question 32

Essay

Expand Test Center A at the end of year 0 to 1,500 units per week,matching Test Center B,at a cost of $100,000,then expanding both Test Centers to 2,000 units per year at the end of year 3,at an additional cost at that time of $250,000.
Burdell Labs will not consider projects that don't show a 5th year positive net present value using a discount rate of 15%.What are the pre-tax cash flows for the two alternatives compared to the base case of doing nothing for the next five years,and what action,if any,should Burdell take?

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Behaviors or actions that are considered normal or requisite according to societal standards.

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