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Green Inc. expects sales to increase by 3% per year for the foreseeable future. Operating costs are expected decline by 1% per year for the
Green Inc. expects sales to increase by 3% per year for the foreseeable future. Operating costs are expected decline by 1% per year for the foreseeable future. For the most recent fiscal year-end, Green had sales of $10,000,000 and operating cost of $11,000,000, generating an operating income of minus $1,000,000. Assume zero taxes.
Estimate the present value of Greens operating income assuming a discount rate of 10%.
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