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A firm is considering a capital expansion project with the following expected cash flows (in millions): Time (t) 0 2 3 4 5 6 Cash

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A firm is considering a capital expansion project with the following expected cash flows (in millions): Time (t) 0 2 3 4 5 6 Cash flow (millions) -60 10 20 30 40 50 40 Abandonment (millions) n.a. 30 25 30 25 20 n.a. Compute the net present value, if the cost of capital for this project is 14 percent. Interpret if the project should be undertaken

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