The manager is considering a project. The project generates the cash flow $124 at t. How- ever, the cash flow at t2 decreases to $2. From t2 on, the cash flows increase at a rate of 10% forever. The constant spot rate of return is 12%. (c) At t3 (right after receiving the cash flow at t3), the manager is fired. The company wants to sell the project to an investor, Mr. White. The selling price is $125. Will Mr. White buy this project? Why? (Hint: Mr. White discounts future cash flows using the same spot rate of return.] [10 points) Solution