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November 27, 2014

Homework Help: corporate finance

Posted by isabella on Sunday, February 4, 2007 at 10:36pm.

A company is considering a $250 million investment in land that it will hold for 25 years. The pretax net cash flows are $40 million per year and land prices are expected to rise at a rate of 7% per year. The opportunity cost of capital is 13%, inflation is 2% and tax rate is 45%. What is the NPV of this project?

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