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6-Mr. X, a friend of yours, is asked to invest in the following project: Installation and operation of a facility with a life span of

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6-Mr. "X", a friend of yours, is asked to invest in the following project: Installation and operation of a facility with a life span of ve years. The initial investment is $90M. It will have a net prot of $25M/Yr the rst two years and $30M/Yr in years 3,4, and 5. At the end of year 5, it has to be disposed of at a cost of $10M with no resale value. If he has the money and his opportunity cost of money is 10% [i=10%), would you advise him to invest or not? Yes? No? Why? Explain

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