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You are contemplating the following investment using money you have in the bank Investment amount: $5 million Revenue growth over the 10 year period: Revenue

You are contemplating the following investment using money you have in the bank

Investment amount: $5 million

Revenue growth over the 10 year period: Revenue is expected to be $800,000 in the first year [2016] and to increase 5% each year over the 10 year period

Costs are estimated to be $200,000 in the first year and to increase 4.25% each year over the 10 year period.

  1. Can you make a profit [positive return] on this investment?
  2. Under what conditions would it be profitable or not?

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