Mr. White can invest in a food packing process. This investment needs $1,000,000 initial investment. If he invests in this project now, he can collect his first revenue next year, which will be $80,000. The annual revenue will grow 5% a year. Total annual costs of the project would be about 10% of the annual revenue. The life span of this project is expected to be 28 years. What is the net present value of this project, if the appropriate discount rate is 8 percent?
The question belongs to Finance and it discusses about calculation of NPV for a project which is supposed to have a life span of around 28 years.
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