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You are an analyst working for Goldman Sachs, and you are trying to value the growth potential of a large, established company, Big Industries. Big

You are an analyst working for Goldman Sachs, and you are trying to value the growth potential of a large, established company, Big Industries. Big Industries has a thriving R&D division that has
consistently turned out successful products. You estimate that, on average, the division launches two projects every three years, so you estimate that there is a 69% chance that a project will be
produced every year. Typically, the investment opportunities the R&D division produces require an initial investment of $9.9 million and yield profits of $1.06 million per year that grow at one of three
possible growth rates in perpetuity: 2.9%,0.0%, and -2.9%. All three growth rates are equally likely for any given project. These opportunities are always "take it or leave it" opportunities: If they are
not undertaken immediately, they disappear forever. Assume that all the probabilities are risk-neutral probabilities, which means the cost of capital is always the risk-free rate and risk-free rates follow
this path: The current interest rate for a risk-free perpetuity is 7.7%; in one year, there is a 61% chance that all risk-free interest rates will be 9.7% and stay there forever and a 39% chance that they
will be 5.7% and stay there forever. The current one-year risk-free rate is 7.2%. What is the present value of all future growth opportunities Big Industries will produce? (Hint: Make sure to round all
intermediate calculations to at least four decimal places.) PLEASEEE!
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