You are evaluating a project that cost $10 million today at time t=0. The project yields no cash flow for t=1 t=2 and t=3. The project pays an initial cash flow of $1 million at t=4 and then annual cash flows grow forever (i.e. in perpetuity) at a 3% annual rate. The discount rate r is 8%. What is the NPV of this project (rounded to two decimal points)?Why the answer is $5.88 million?
You are evaluating a project that cost $10 million today at time t=0.
by | Sep 6, 2025 | Statistics
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