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a. GMPK wants to embark on a project called An Accountant in Every Cubicle or AAEC. The project will cost $1 billon and generate $500

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a. GMPK wants to embark on a project called An Accountant in Every Cubicle or AAEC. The project will cost $1 billon and generate $500 million in cash flow for each of the next 5 years. If GMPK's cost of capital is 20 percent, what is the value of the project? b. What is the value added or lost to GMPK if they undertake the AAEC project? At the end of the 5th year of the AAEC project, GMPK's CFO projects growth in cash flows of 10 percent per year in perpetuity for project AAEC. If another firm offers to purchase AAEC at the end of the 5th year and uses a 20 percent discount rate to value it, what is the most the firm would offer

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