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You can invest in a risk-free technology that requires an upfront payment of $1.1 million and will provide a perpetual annual cash flow of $81,000.

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You can invest in a risk-free technology that requires an upfront payment of $1.1 million and will provide a perpetual annual cash flow of $81,000. Suppose all interest rates will be either 10.3% or 4.7% in one year and remain there forever. The risk-neutral probability that interest rates will drop to 4.7% is 89%. The one-year risk-freo interest rate is 8.3%, and today's rate on a risk-free perpetual bond is 5.5%. The rate on an equivalent perpetual bond that is repayable at any time (the cailable annuity rate) is 9.4% What is the NPV of Investing today? OA $-124,096 OB. $238,298 OC. $623.404 OD. $372,727 OE. $-313,592

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