Wansley Lumber is considering the purchase of a paper company, which would require an

initial investment of $300 million. Wansley estimates that the paper company would

provide net cash flows of $40 million at the end of each of the next 20 years. The cost of

capital for the paper company is 13%.

a. Wansley Lumber is considering the purchase of a paper company, which would require an initial investment of $300 million. Wansley estimates that the paper company would provide net cash flows of $40 million at the end of each of the next 20 years. The cost of capital for the paper company is 13%.