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Posted on Aug 20, 2024

A company would like to invest in a capital budget project. In 4 0 years, the project will be worth $ 5 0 0 ,

A company would like to invest in a capital budget project. In

40

years, the project will be worth $

500, 000

in today's dollars.

How much should this company invest today, assuming an average inflation rate of

2 %

and a

10 %

annual return?

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