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Calculate how long will shelley to recover her investment

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Question - Assume one of Mark's cousins (Shelley) is, after all, able to help fund the business. She offers to buy Data help shares for £8,000, enabling the company to immediately repay the £8,000 loan. She will then hold 40% of the shares in the company.

Using discounted cashflow techniques, calculate how long will it take Shelley to recover her investment?

Assume that:

She is assured of a genuine 40% share in dividends and capital growth.

Her cost of capital is 1% per month.

After June, cash receipts increase at 5% a month and cash payments increase at 2% a month.

Reference no: EM133182478

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