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Suppose the City of Athens is considering to build a new amphitheater in a
previously undeveloped part of town.
A.Given the cost and revenue information
below, should the city undertake this project?
B. Find the NPV of the project, assuming
an interest rate of 10%
initial
stage
early stage(year 1
and 2)
Last stage(years 3,4,
and 5
cost per year(millions) 150 10 10
Revenue per
year(millions0
0 40 80

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