The average annual rate of return for your start up company for
the past several years has been 20% and has made you rich. To
maintain this growth, you are evaluating two projects: the first to
expand the production capacity and the second is open a new office.
You have developed the following table to compare the two:
Comparison of projects
Year Plant Expansion
New Office
Initial Outlay 3,500,000 500,000 1 1,500,000...