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Now assume Plentix is considering a new project that

costs $200 million and will generate free cash flows in its

first three years of $10 million, $15 million, and $20

million, respectively. After the third year, free cash flows

are expected to grow at an annual rate of 7

%.Plentix's

has determined that the appropriate cost of capital for this

project is 16%.

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What is the year 3 continuation value?

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What is the NPV of the project?