Simple payback calculation but with discounting

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The United States purchased Alaska in 1867 for $7.2M (where M stands for million). Assume that federal tax revenue from the state of Alaska (net federal expenditures) is $55.1M in 2012 and that tax revenue started in 1868 and has steadily increased by 3% annually since then. Assume that the cost of capital (or interest rate) is 6%. What is the NPV of the Alaska purchase, assuming that you are in 1867 looking forward? (Enter just the number in dollars without the $ sign or a comma and round off decimals.)

Hint: Simple payback calculation, but with discounting.

Reference no: EM13728732

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