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Dymondmonae Dymondmonae
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4 years ago
A firm is considering investing in a new project with an upfront cost of $400 million.  The project will generate an incremental free cash flow of $50 million in the first year and this cashflow is expected to grow at an annual rate of 4% forever.  If the firm's WACC is 13%, what is the value of this project?

▸ $155.6 million

▸ $577.8 million

▸ $555.6 million

▸ $177.8 million
Textbook 
Fundamentals of Corporate Finance

Fundamentals of Corporate Finance


Edition: 2nd
Authors:
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meigsflameigsfla
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Posts: 387
4 years ago
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Dymondmonae Author
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4 years ago
Good timing, thanks!
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