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in bpp kit q 50 , leaminger co part B ,company is facing capital rationing. a marginal investment project requires an outlay of
$ 500 000 and generates NPV of 1000 000 , I can understand the loss per every dollar of expenditure will be 500/1000 = 0.2 c due to lack of investment in this new project, but how is the profit foregone being calculated ? i.e for purchase its 0.2 x the initial cost and for operating lease its , 0.2 x rent ?
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