American Steel Corporation is considering two investments. One is the purchase of a new,continuous caster costing $100 million. Th e expected net present value of this project is $20 million. The other alternative is the purchase of a supermarket chain, also costing $100 million. It, too, has an expected net present value of $20 million. The firm’s management is interested in reducing the variability of its earnings.,a. Which project should the company invest in?,b. What assumptions did you make to arrive at this decision?,
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