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What is the present value of this project

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Reference no: EM132944065

Question - Use the following information to answer question 1 and 2:

Scenario - Inflation is 2% per year and the interest rate is 8% per year. Your perpetuity project has cash flows that grow at 1% faster than inflation forever, starting with $20 next year.

1. What is the real interest rate?

2. What is the present value of this project?

Reference no: EM132944065

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