A projects annual operating cash flows for the next five


A project's annual operating cash flows for the next five years are $120,000, $150,000, $180,000, $200,000, and $220,000. Assuming a discount rate of 12% and a terminal growth rate of 3%, answer the following questions.

(A) What is the terminal value for assessing the cash flows after the fifth year?

(B) What is the total value of the cash flows of the firm?

(C) What proportion of the total cash flow value depends on the terminal value?

 

 

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Finance Basics: A projects annual operating cash flows for the next five
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