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Your firm anticipates a breakthrough in the way they drilled for gas and expect the new method to be put in place soon. They expect their first cash flow of $800,000 from this method four years for today. In other words, their first cash flow is 4 years from today. They also expect that the cash flow to grow by 2% indefinitely and they want to assume a conservative interest rate of 6%. What is the present value of this cash flow today?

Financial Management, Finance

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