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A project promises to return $1,700 next year and $5,000 the year after. The years following, returns are expected to total $5,300, and then $5,618, followed by $5,955, and so forth at this rate indefinitely. These numbers describe the long run growth rate. The cost of capital for the project is estimated to be 15%. The project cost is $12,000, with payment expected right now and returns expected each year beginning one year from now. What is the NPV of the project?

Financial Management, Finance

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