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Susan Wilson wants to open a restaurant in a historic building. The property can be leased for 20 years, but not purchased. She believes her
Susan Wilson wants to open a restaurant in a historic building. The property can be leased for 20 years, but not purchased. She believes her restaurant can generate a net cash flow of $72,000 the first year and expects an annual growth rate of 5 percent thereafter. If a discount rate of 16 percent is used to evaluate this business, what is the present value of the cash flows that it will generate?
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