Calculate the least number of years the product must sell

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Reference no: EM132966822

Question - A company is considering engaging in a project. You are given the following information about a project:

i) The project requires an immediate investment of 7 million.

ii) It will generate free cash flows of 1.15 million per year at the end of the first year, growing 2.5% per year, until the product becomes obsolete and cannot be sold.

iii) The cost of capital is 8%.

Using a break-even analysis, calculate the least number of years the product must sell in order for the company to engage in the project.

Reference no: EM132966822

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