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Company X has a plant producing mountain bikes. The plants current operations are estimated to generate a 10million pounds cash flow per year(in perpetuity). The
- Company X has a plant producing mountain bikes. The plants current operations are estimated to generate a 10million pounds cash flow per year(in perpetuity). The company is considering the option to halt the production of mountain bikes and invest 100million pounds to reconvert the plant to produce electric bikes. This is estimated to increase total company cash flows from 10million pounds to 20 million per year in perpetuity. Assuming a 10% discount rate, the NPV of this project is
- 100 million pounds
- 0 pounds
- 200 million pounds
- 10 million pounds Please give me a explanation for you answer, Thank you!
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Principles Of Public Finance
Authors: Toshihiro Ihori
1st Edition
9811023883, 978-9811023880
