Assume a multinational company is considering a capital project where it will initially invest 1,500,000 and receive an expected cash flow of 500,000 each year over five years. Assume also that the company's normal weighted average cost of capital (discount rate) is 12% but the investment is going to be made in a country with political risk such that there will be a risk premium of 2% over the normal discount rate. what is the npv of the project?

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Step 1 Calculate the present value of the future cash flows The futur... View the full answer