The company is starting new chemicals production facility, Ask an Expert

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The company is starting new chemicals production facility with an initial investment of $1billion. They don’t expect to generate any cash flow for the first two years. In year 3, cash flow is expected to be $150 million and will increase by 15% every year till year 7 after which time it will decline by 2% until year 9. The company expects no growth in cash flows beyond year 9 and cash flows to continue at year 9 levels into foreseeable future.

Calculate the NPV and the pay-back period of this project.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92760334

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