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22) The weighted average cost of capital of a firm is 10 per cent. The firm is planning to buy a new plant that will
22) The weighted average cost of capital of a firm is 10 per cent. The firm is planning to buy a new plant that will help the company save $30 million for the first two years (each year). Later the savings will drop by 50 per cent, and these savings will remain constant every year forever. The new plant requires an initial investment of $150 million. The NPV of the project is equal to:
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