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You own an oil pipeline that will generate a $3.8 million cash return over the coming year. The pipelines operating costs are negligible, and it
You own an oil pipeline that will generate a $3.8 million cash return over the coming year. The pipelines operating costs are negligible, and it is expected to last for a very long time. Unfortunately, the volume of oil shipped is declining, and cash flows are expected to decline by 5.5% per year. The discount rate is 9%.
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