The following project takes place over a 20 year period of time. All references to time are relative to the beginning of the project.

Suppose that an electric motor factory will take a year to build: $7 million is spent right away, and another $7 million is spent at the end of the first year.Also, suppose the factory is expected to lose $1.0 million at the end of year two and $0.5 million at the end of year three. At the end of each of the years, four through 20, it will earn $0.88 million, when it will be scrapped for $1.0 million at the end of year 20.

If the discount rate is 5 percent, what is the NPV?

The NPV is $___ ?

million.

Homework: Chapter 15 Homework Save Score: 0 of 5 pts 5 of 9 (9 complete) HW Score: 71.43%, 25 of 35 pts X Exercise 5 Question Help The following project takes place over a 20 year period of time. All references to time are relative to the beginning of the project. Suppose that an electric motor factory will take a year to build: $7 million is spent right away, and another $7 million is spent at the end of the first year. Also, suppose the factory is expected to lose $1.0 million at the end of year two and $0.5 million at the end of year three. At the end of each of the years, four through 20, it will earn $0.88 million, when it will be scrapped for $1.0 million at the end of year 20. If the discount rate is 5 percent, what is the NPV? The NPV is $ million. (Enter a numeric response rounded to two decimal places.) Enter your answer in the answer box and then click Check