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A project requires an immediate investment of 8 million. An additional investment of 2 million is required at the end of year 1. Starting in
A project requires an immediate investment of 8 million. An additional investment of 2 million is required at the end of year 1. Starting in the second year, the project will generate free cash flows of 1 million per year, growing 3% per year perpetually.
Based on a break-even analysis, determine the cost of capital to break even.
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