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1. Broadway Inc. is considering a new musical. The initial investment required is $2,030,000. Every year, the free cash flow to the firm from the

1. Broadway Inc. is considering a new musical. The initial investment required is $2,030,000. Every year, the free cash flow to the firm from the project is expected to be $290,000, continuing forever. Investments with similar risk deliver a rate of return of 11%.

What is the true NPV of the project if the company can abandon the project after the first year?

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