LHP expects net cash flow of £70,000 in perpetuity if the firm makes no new investments. The firm has the opportunity to add a new production line to the business. The immediate outlay for this opportunity is £120,000 and the net cash flows from the line will begin one year from now. The new line will generate £45,000 in additional net cash flows in perpetuity. These net cash flows will also grow at 2%. The firm’s discount rate is 12%, and 250,000 shares of LHP stock are outstanding. Assume that all net cash flows can be paid out as dividends.