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An environmental project requires an initial investment of $1,000,000 in year 1 then has ongoing
costs of $100,000 per year forever. Benefits from the program are $0 years 1 and 2;$20,000 in
year 3 ; and $45,000 in year 4 . In year 5 benefits increase to $150,000 and stay at that level
forever. (A) What is the net present value of the project at a discount rate of 10% (rounded to the
nearest dollar)? (B) Should the environmental project be pursued? Show all work. If net present
value is calculated in Excel attach the file.

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An environmental project requires an initial investment of .pdf

  • 1. An environmental project requires an initial investment of $1,000,000 in year 1 then has ongoing costs of $100,000 per year forever. Benefits from the program are $0 years 1 and 2;$20,000 in year 3 ; and $45,000 in year 4 . In year 5 benefits increase to $150,000 and stay at that level forever. (A) What is the net present value of the project at a discount rate of 10% (rounded to the nearest dollar)? (B) Should the environmental project be pursued? Show all work. If net present value is calculated in Excel attach the file.