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A company plans to install some new equipment 4 years from today. The equipment is expected to have an economic life of 7 years from
A company plans to install some new equipment 4 years from today. The equipment is expected to have an economic life of 7 years from the day it is installed. The company expects the equipment to generate $11.5 million in cash flows per year (received at the end of each year) during its 7 year life. What is the value of these cash flows to the company today assuming an interest rate of 12% compounded annually? A $525 million B. $47.8 million C. $33,4 million D. $29.2 million E. None of the above
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