Company is considering two expansion plans

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Reference no: EM131907434

The Copious Brewing Company (CBC) is considering two expansion plans. The first, Plan A, is to spend $50 million on a state-of-the-art large scale, green, fully integrated brewery which will provide an expected cash flow stream of $8 million per year for 20 years. The 2nd option, Plan B, is to build a less integrated, less green and less efficient facility for $15 million which is expected to generate $3.4 million per year for the next 20 years. The cost of capital for CBC is 10%. Which decision is the best financial decision for CBC since they cannot choose both and why?

Reference no: EM131907434

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