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QUESTION
Imagine you are considering acquiring a company. You have received their financial statements, and have learned that they have annual cash flows of:...
Imagine you are considering acquiring a company. You have received their financial statements, and have learned that they have annual cash flows of:Year 1: $10 MillionYear 2: $8 MillionYear 3: $14 MillionYear 4: $17MillionAdditionally, assume that in year 4 you will have a terminal cash flow of $250 Million, should you decide to sell the company at that time. If your discount rate is 15%,a. What is the NPV of the project?
Year1234NPV Cash flows$10.00$8.00$14.00$267.00$176.61