A project is expected to generate the following sequence of


A project is expected to generate the following sequence of cash flows over the first five years of its life: Year 0 1 2 3 4 5 CF ($m) -65.00 8.00 8.00 9.00 9.50 10.00 Assume the appropriate discount rate for the project is 10%. (A) Calculate the NPV over the five years. (B) This project does not end after the fifth year but instead will generate cash flows far into the future. Estimates the project’s terminal value, assuming cash flows after year 5 will continue at $10.00 million per year in perpetuity and then recalculate the investment’s NPV.

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Financial Management: A project is expected to generate the following sequence of
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