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Blue Bull Inc., wants to introduce a new line of business as CEO believes in...

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Finance

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Blue Bull Inc., wants to introduce a new line of business as CEO believes in the current trend of new energy drink. The initial investment required for the project is estimated to be $1,300,000. Subsequent net cash inflows will be $140,000 for the next two years and then the cash flows are projected to grow at a rate of 3.0% per year forever. If the required return of Blue Bull is 13 percent, should the new energy drink business be started? Why? ca. Yes, because NPV of the project is $200,491.64 b. Yes, because NPV of the project is $62,831.86 C. No, because NPV of the project is -$200,491.64 d. No, because NPV of the project is - $62,831.86 e. None of above

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