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You can invest in a project either now or next year. If it is successful, you get a perpetual cash flow of $ 3 0
You can invest in a project either now or next year. If it is successful, you get a perpetual cash flow of $M that starts the following year, and grows at a rate of percent. If it is unsuccessful, you get a perpetual cash flow of $M that starts the following year and grows at a rate of percent. The project costs $M and has a discount rate of percent. Both states are equally likely.
What is the NPV of the project if invest today?
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