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A Project Has a Net Present Value of NPV =

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A project has a net present value of NPV = €10,000. In order to invest in the project, the German government requires that you undertake another project with the following cash flow stream: CF0 = -€5000, E[CF1] = €1000, E[CF2] = €1000, and E[CF3] = €1000. The appropriate discount rate for this project is i = 10%. What affect does this tie-in project have on your original NPV estimate?


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