Cost of Equity for the VenCap. Project; the Cost of equity is 22 Percent

VenCap Inc. Madrid is a Venture capital financier in Madrid with branches in Barcelona and Geneva. For its HNW clients, Venture Cap estimates that investing 4.5 million in a particular venture capital project can return 60 million at the end of six years if it succeeds; however it realizes that the project may fail at any time between now and the end of six years. The following table has VenCap's estimates of probabilities of failure of the project for each year given that it has survived the previous year etc. 1 2 3 4 5 6 Year: Failure Probability: 0.28 0.25 0.22 0.18 0.18 0.10 Compute the expected NPV of the Venture capital project and recommend whether Ven Cap should accept or reject the project