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What is the net present value for the project

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Question - Severn plc is assessing a new project to expand its business. It will require an investment of £20m and will generate incremental cash flows of £1.75m for each of the first 5 years and then £2m each year in perpetuity. If the cost of capital is 8% what is the net present value for the project (to 1 decimal place)?

a. 27.1%

b. 16.6%

c. 35.0%

d. 12.9%

e. None of these answers

Reference no: EM133148643

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