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Company XYZ is evaluating an investment that promises the following cash flow: $500,000 million at the end of Year 1, $1,000,000 million at the end
Company XYZ is evaluating an investment that promises the following cash flow: $500,000 million at the end of Year 1, $1,000,000 million at the end of Year 2, and $1,500,000 million at the end of Year 3. How much should Company XYZ be willing to invest? (10-year Treasury Note Rate is 1%; Average Market Rate of Return is 10%; is 1.0; interest rate = 5%; Debt/Total Capital = 40%; tax rate = 25%)
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