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Weasleys Exterminators runs a chain pest control service centers. Analysts predict that if the company opens a location in a new city, it will cost

Weasleys Exterminators runs a chain pest control service centers. Analysts predict that if the company opens a location in a new city, it will cost $900,000 up front and generate free cash flow as follows: year Free cash flow 1 $60,000 2 $70,000 3 $80,000 After year three, the free cash flows will grow forever at a 3% rate. Weasleys cost of capital is 9%. a. What is the NPV of opening up a new location? b. What is the present value today of all cash flows that a new location will generate from year four and beyond? What percentage of the projects total cash inflows does that account for? c. What is the NPV if the long-term growth rate in cash flows is 1%? 0%

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