Michael Dell is considering investing $4.5 billion today to take Dell Inc. private. If he takes Dell Inc. private, he will not receive any benefits for 4 years. Then he will receive $225
million per year for 4 years starting exactly five years from today. After that, he will receive $275 million per year for the following 3 years. At that point, the cash flows will increase at 4% per year forever. If Michael Dell has a discount rate of 9%, what is the NPV of this investment and should Michael Dell make it?
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