Expected to produce free cash flows

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Reference no: EM131320484

You are considering opening a new plant. The plant will cost $500 million upfront. After that, it is expected to produce free cash flows that will last forever. The cash flow is expected to start at $30 million in the first year and grow at a constant rate of 3%. Calculate the NPV (in $ mm, round to nearest million) of this investment opportunity if your opportunity cost of capital is 8%.

Reference no: EM131320484

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