After year 3 the cash flows will increase by 4 per year


A project costs $121,000 today to get started and will produce after-tax cash flows of $10,000 in year 1, $10,000 in year 2, and $20,000 in year 3. After year 3 the cash flows will increase by 4% per year forever. What is the NPV of the project if the discount rate is 15%?

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Finance Basics: After year 3 the cash flows will increase by 4 per year
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