Question: Capitol Health Plans, Inc. is evaluating two different methods for providing home health services to its members. Both methods involve contracting out for services, and

Capitol Health Plans, Inc. is evaluating two different methods for providing home health services to its members. Both methods involve contracting out for services, and the health outcomes and revenues are not affected by the method chosen. The cost of capital is 9%. The incremental cash flows for the decision are all outflows. Here are the projected flows

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