Question
Assume that a project earns $12mln in the next year. These cash flows are expected to decrease with -2% per year in the following years.
Assume that a project earns $12mln in the next year. These cash flows are expected to decrease with -2% per year in the following years. The project has an infinite life. Further assume that the discount rate is 4%. What is the present value of these cash flows? Please give your answer in two decimals.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Stocks Bonds And The Investment Horizon
Authors: Haim Levy
1st Edition
9811250146, 978-9811250149
