ABC Co. considers investing in a new project. The project is not expected to generate any profit for the first four years. The company expects to earn the first profit of ( $ 1 ) million in year 5 , which will grow at ( 3 % ) each year indefinitely. Calculate the present value of future profits using a 10% discount rate. Tip: Drawing a time line of the cash flows will help you visualize this problem.

ABCC0. considers investing in a new project. The project is not expected to generate any profit for the first four years. The company expects to eam the first profit of $1 million in year 5 , which will grow at 3% each year indefinitely. Calculate the present value of future profits using a 10\% discount rate. Tip: Drawing a time line of the cash flows will help you visualize this