Suppose that your company has an investment opportunity in a project that initially (year 0) costs $10 million. The project will generate profits of $5 million each year for the next two years (years 1 and 2) and then the project will have reached its useful life and will be liquidated and the remaining assets will be sold for $1 million (year 3).

Assume a discount rate of 10%.

• Is this a profitable project for your company?
• Why?: You should include the NPV of this project in your answer