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Calculate the net present value of this project

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Question: Say QAN is considering buying more airplanes to take advantage of future growth prospects. QAN are thinking of investing $800m in these airplanes now, and they think they can generate free cash flows (FCFs) of $300m, $350m and $400m over the next three years. Assume that a discount rate of 11% is reasonable for QAN.

(a) Calculate the net present value (NPV) of this project. Should the project be accepted or rejected? Explain your answer.

Reference no: EM133715747

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