Question: Olivia has been asked to evaluate a project. The project is estimated to have a first cashflow of $120k, which will occur one year from
Olivia has been asked to evaluate a project. The project is estimated to have a first cashflow of $120k, which will occur one year from today. The cashflows will increase by 4% per year for 4 additional years. After that point, the cashflows will remain the same for 5 years. The upfront cost to take the project is $950k, and the appropriate annual discount rate is 6%. What is the projects NPV?
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