Question: Consider a firm that is expected to generate a net cash inflow of CF1=$50,000 starting six years from today, that is, at the end of
Consider a firm that is expected to generate a net cash inflow of CF1=$50,000 starting six years from today, that is, at the end of year six. The cash flows will then increase at a constant rate of 5 percent each year for the following 29 years. The firm will then cease operating. Note that there will be a total of 30 annual cash inflows, with the last inflow at the end of year 35. Suppose that the relavant discount rate is 1- percent compounded semiannually. In order to determine the selling price for this firm, find the present value (today's value) of these future cash inflows
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