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Consider two streams of cash flows, A and B . Stream A s first cash flow is $ 9 , 7 0 0 and is
Consider two streams of cash flows, A and B Stream As first cash flow is $ and is received three years from today. Future cash flows in Stream A grow by percent in perpetuity. Stream Bs first cash flow is $ is received two years from today, and will continue in perpetuity. Assume that the appropriate discount rate is percent. a
What is the present value of each stream?a
Suppose that the two streams are combined into one project, called C What is the IRR of Project C
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