Reference no: EM132498099
The benefits and costs of a natural resource project over a 5-year period are as shown in the table that follows. Determine the net present value of the project if the discount rate is 7 percent. How would the net present value of this project change if we use a discount rate of 3 percent?
Year: 0 . Benefits ($): 0 . Costs ($): 325,000
Year: 1 . Benefits ($): 100,000 . Costs ($):20,000
Year: 2 . Benefits ($): 100,000 . Costs ($):20,000
Year: 3 . Benefits ($): 100,000 . Costs ($):20,000
Year: 4 . Benefits ($): 100,000 . Costs ($):20,000
Year: 5 . Benefits ($): 120,000 . Costs ($):20,000