Should you undertake the project

Reference no: EM131926585

Question: You are considering undertaking a new project. Development costs will be $100 now. Incremental after-tax cash flows will be $10 one year from now. Starting in year 2 cash flows will grow at g = 10% for the next 2 years, then at 2% indefinitely. Assume a 3% cost of capital. Should you undertake this project? Why or why not?

Reference no: EM131926585

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