You are considering manufacturing a new Web browser. Startup costs are $18 million and you expect to produce FCFF of $1.

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answerhappygod
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You are considering manufacturing a new Web browser. Startup costs are $18 million and you expect to produce FCFF of $1.

Post by answerhappygod »

You are considering manufacturing a new Web browser. Startup
costs are $18 million and you
expect to produce FCFF of $1.15 million the first year (t=1) and
FCFF that grows at a constant
rate of 15% for the next 7 years (t=2-8). After that, the FCFF is
expected to grow at a constant
7% forever. What is the NPV of the project if the project cost of
capital is 19%?
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