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7. The Keats Coffee Company is evaluating the within-plant distribution system for its new roasting,...

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7. The Keats Coffee Company is evaluating the within-plant distribution system for its new roasting, grinding, and packing plant. The two alternatives are (1) a conveyor system with a high initial cost but lower annual operating costs and (2) several forklift trucks, which cost less but have considerably higher operating costs. The decision to construct the plant has already been made, and the choice here will have no effect on the overall revenues of the project. The cost of capital for the plant is 11%, and the projects' expected net costs are listed in the following table: (10) Expected Net Cost Year Conveyor Forklift --S525,000 $200,000 0 1 -120,000 -160,000 2 -120,000 -160,000 3 --120,000-160,000 4 -120,000 -160,000 5 -70,000 -160,000 a. What is the IRR of each alternative? If you can't find the IRR, explain why you can't. b. What is the present value of the costs of each alternative? Which method (conveyor or nould he chosen

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