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You are considering building a new facility. It will cost $ 6 9 6 million upfront. After that, it is expected to produce FCFs of
You are considering building a new facility. It will cost $
million upfront. After that, it is expected to produce FCFs of $ million at the end of every year for years. At the end of years, the revenues will stop but there will be a onetime cleanup FCFoutflow of $ million that will occur in year No other CFs will occur after this. The discount rate is for this investment.
a Calculate the NPV of this investment.
b How many potential IRRs are there?
c Answer the following TrueFalse questions.
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