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A company is considering an investment project that costs $10m at the beginning, generates FCF of...

A company is considering an investment project that costs $10m at the beginning, generates FCF of $1m at the end of the first 5 years, $2m for the next 5 years, and $5m that grows at a constant rate of 3% after 10 years (C10=$2m, C11=$5m, C12=$5m*(1+3%), C13=$5m*(1+3%)*(1+3%)). Given a discount rate of 15%, what is the NPV for such a project?

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Answer #1

NPV = $6.99 million

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