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4 . BBB Tourism Corporation plans to invest in a new project which costs $ 9 , 0 0 0 , 0 0 0 .

4. BBB Tourism Corporation plans to invest in a new project which costs $9,000,000. It expects to generate cash flows of $2,000,000 ; $3,999,000 ; and $4,999,000 over the next three years. If the discount rate for the firm is 6 percent, should BBB invest in this project? Assume that after three years, BBB Corporations cash inflows will be $2,000,000 forever. The cost of capital remains 8%. Calculate the net present value of BBB Corporations cash inflow? Do you still recommend this project?

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