Question 3

Another project would produce net revenues of $180,000 per year, for 9 years. These revenues are expected to grow at a constant 0,5% per year, and are assessed at a cost of capital of 2,5%:

Would it still be profitable if it required an initial investment of $1,900,000?

If we invest these annual revenues of $180,000 growing at a 0,5% per year in a bank account that offers an annual rate of 4% for 9 years, how much will we have at the end?