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Question 4 20 pts Contrail Air Inc. runs a small drone manufacturing business. For this year, the company expects real net cash flow of $175,000.
Question 4 20 pts Contrail Air Inc. runs a small drone manufacturing business. For this year, the company expects real net cash flow of $175,000. The company expects its cash flow to erode at a rate of 2% percent per year in perpetuity. The appropriate real discount rate for the company is 9% percent. Assume all cash flows received at the end of the year. What is the present value of the cash flows? Cash flow5175000 Cash flow growth rate 1-2% Required return 9% $(129,629,629.63) $2,333,333.33 $1,666,666.67 $(29,166.67)
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