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Batman is considering opening a hotdog stand. The hotdog stand will cost $250,000 upfront today. After that, Batman expects to produce profits of $21,000 at
Batman is considering opening a hotdog stand. The hotdog stand will cost $250,000 upfront today. After that, Batman expects to produce profits of $21,000 at the end of every year. The cash flows are expected to last forever. Calculate the NPV of Batman's project if his cost of capital is 9.5%. Should Batman pursue the project? What if the cost of capital is 8%?
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