About dam and and electrical generation project

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A small municipality in Placer County, CA is thinking about a dam and and electrical generation project. Although the dam might be productive for many years, the county board members have directed the opportunities team not to consider projects longer in duration than 5 years. The dam will cost 50 million to build. Revenues are estimated at $12 million year 1, 15 million year 2, 20 million year 3, 21million in year 4, and 21 million in year 5. Assuming that the municipality could earn 8% in the stock market or with a certificate, what is the discount factor in the 4th year?

Reference no: EM131817331

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