Explain why discounting would be necessary on analysis of a project that is expected to last 10 years. The project will involve uneven cash flows for 10 years. As this is not a math problem the amount per year is not an issue but the total is expected to be $15,000,000 over the ten-year period. When answering, please consider:

• the risk involved for the company/shareholders,
• the product being produced by the investment (in style/fashion, i.e. plain or boutique, high tech vs. low tech, international or domestic market, etc.),
• governmental considerations - regulations, international, tax

The answer should be positive in that something could go wrong but you, the financial analyst, have considered the potential problem and the ramifications if the event did happen.