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Question 1 (a) Explain why the treatment of investment differs between no growth and growth models in a terminal value calculation? (b) Calculate the terminal

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Question 1 (a) Explain why the treatment of investment differs between no growth and growth models in a terminal value calculation? (b) Calculate the terminal values as under for a non-growth and a growth model: a. Operating cash flow (after tax)- $2.400m pa; b. Normalised annual investment-$0.400 pa; C. WACC -10%; d. Growth rate-2.5% pa Question 1 (a) Explain why the treatment of investment differs between no growth and growth models in a terminal value calculation? (b) Calculate the terminal values as under for a non-growth and a growth model: a. Operating cash flow (after tax)- $2.400m pa; b. Normalised annual investment-$0.400 pa; C. WACC -10%; d. Growth rate-2.5% pa

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