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A project will require an initial investment of 129.58 and will generate positive cash flows at the end of the year for 10 years. Let
A project will require an initial investment of 129.58 and will generate positive cash flows at the end of the year for 10 years. Let g be an unknown constant between 0 and 0.05. The first positive cash flow will occur one year after the initial investment, and will be in the amount of 15(1+g). Each subsequent cash inflow will increase by 100g%. Assuming that the cost of capital for the project is 6%, determine the value of g for which the project will break even. 2.53% 2.84% 2.21% 3.16% 3.48%
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