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The management team of a cable company estimates that the cost of installing new cable in a certain area of the city is $17 million. However, they will receive a cash flow of $1.4 million per year indefinitely. The net present value (NPV) of this investment at a cost of capital of 6.5% indicates that this is a worthwhile investment. By how much would the cost of capital have to increase for the NPV to be zero? Show your work.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91602584

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