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Suppose firm A projects cash flows of $5 million in perpetuity on an initial investment in Korea of $22 million. If the required return on

Suppose firm A projects cash flows of $5 million in perpetuity on an initial investment in Korea of $22 million. If the required return on this investment is 17%, how large does the probability of expropriation in year 5 have to be before the investment has a negative NPV? expected compensation in year 5 in the event of expropriation is 0

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