Tesla Corporation wants to build a new electric car model. The CEO, Elon Musk estimates...
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Tesla Corporation wants to build a new electric car model. The CEO, Elon Musk estimates that a net cash inflow of $205,000 for the firm during the first year, and the cash flows are projected to grow at a rate of 5.2 percent per year forever. The project requires an initial investment of $1,800,000. a) Assume that the firm requires a return of 13 percent on such undertakings, should the project be accepted? b) At what constant growth rate would the company just break even if it still required a return of 13 percent on its investment?
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