Reference no: EM132967792

Question - Minaba trading company is considering investing in a capital project. The cost of the project will be $15 million at the beginning of the first year, and $(0.5 × 1.04^y-2) million payable at the beginning of year y, y = 2, 3, ... ,10. The expected returns from the project will be $3 miilion at the end of each year for the first 5 years, increasing by $300000 at the end of each year from years 6 to 10. Calculate the net present value of the proposed project using an interest rate of 4% effective per annum.