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how to calculate npv if the question give two different cost of capital each year
If, for example, the cost of capital is 10% in the first year and 15% in the second year, then to discount a flow in 2 years time you discount for 1 year at 10% and then for a second year at 15%. So multiply by the 1 year factor at 10% and then by the 1 year factor at 15%.
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