Clorox is thinking about introudcing a new brand of cleaning products. Marketing and developing the new products will cost 585 million dollars. In one year, the new products will generate a cash flow of 32 million dollars. In two years, the new products will generate a cash flow of 59 million dollars. In three years, the new products will generate a cash flow of 83 million dollars. After that, cash flows are expected to grow by 2% forever. If the cost of capital is 11%, what is the NPV of this project (in millions)? (Enter your answer in millions. i.e. 5.5 million, not 5,500,000 )

Clorox is thinking about introudcing a new brand of cleaning products. Marketing and developing the new products will cost 585 million dollars. In one year, the new products will generate a cash flow of 32 million dollars. In two years, the new products will generate a cash flow of 59 million dollars. In three years, the new products will generate a cash flow of 83 million dollars. After that, cash flows are expected to grow by 2% forever. If the cost of capital is 11%, what is the NPV of this project (in millions)? (Enter your answer in millions. i.e. 5.5 million, not 5,500,000 )

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter17: Capital And Time

Section: Chapter Questions

Problem 17.6P

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