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Young Pharmaceuticals is considering a drug project that costs $2.52 million today and is expected to...

Young Pharmaceuticals is considering a drug project that costs $2.52 million today and is expected to generate end-of-year annual cash flows of $231,000 forever.

  

At what discount rate would the company be indifferent between accepting or rejecting the project?

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Answer #1

Present value = Cash flow Discount rate Discount rate = 231000 2520000 = g.17% Answer

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