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A major electronics manufacturer expects to generate 4 years of revenue from its recently won government contract. The company forecasts that the revenue will be
A major electronics manufacturer expects to generate 4 years of revenue from its recently won government contract. The company forecasts that the revenue will be $200 million in the first year, and will increase by $5 million every year for the following 3 years (years 2, 3, and 4). Using the end-of-the-year convention, what is the present worth of the entire 4-year revenue stream at an interest rate of 8% per year?
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