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A project will require an initial investment of 131.98 and will generate positive cash flows at the end of the year for 8 years. Let
A project will require an initial investment of 131.98 and will generate positive cash flows at the end of the year for 8 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 20(1+g). Each subsequent cash inflow will increase by 100g%. Assuming that the cost of capital for the project is 8%, determine the value of g for which the project will break even. 04.03% 04.70% 4.37% 03.70% 3.36%
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