Question
evaluating a project that cost $10 million today at time t=0. The project yields no cash flow for t=1, t=2, and t=3. The project pays
evaluating a project that cost $10 million today at time t=0. The project yields no cash flow for
t=1, t=2, and t=3. The project pays an initial cash flow of $1 million at t=4 and the annual cash flows then
grow forever (i.e., in perpetuity) at a 3% annual rate. The project's cost of capital (i.e., the discount rate
r) is 8%. What is the NPV of this project (rounded to two decimal points)?
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
16th edition
125927716X, 978-1259687969, 1259687961, 978-1259277160
