You have just become the Vice President of the X Corporation and your first taskis to determine the firm’s facility investment strategy. You must evaluate the following potentialoptions; your firm only has a maximum of $8 Million in total to invest in new projects.1. An expansion at Facility A will cost $4 Million, take one year to complete,but generate additional net operating cash inflows of $800,000 per year for20 years2. An expansion at Facility B will cost $3.7 Million, take one year to complete,but generate additional net operating cash inflows of $700,000 per year for20 years3. An expansion at Facility C will cost $3 Million, take two years to complete,but generate additional net operating cash inflows of $700,000 per year for20 yearsWhich option (or options) should your firm choose if the discount rate is 12%? You may assumethat net operating cash flows flow at the end of each year.what are the steps to doing this question? I’m getting the wrong answer
Investment strategy
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