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Your company is launching a product that will generate cash flows for 20 years. The first cash flow of $10,000 will occur one year from today (at t=1) and will grow at 5% in each subsequent year for the first ten years at which point the cash flow will plateau and remain constant for the reminder of the product life (so the cash flow grows 9 times, from t=2 to t=10, after which the cash flows remain constant at the amount that was paid at t=10). What is the present value of the cash flows if the discount rate is 7%?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M93060132

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