You've graduated from college and are now working in an investment firm where you advise clients on

investment decisions. Here is the information on a proposed project. How much profit does the project yield,

and should your client invest in this project?

Upfront cost: $$250,000$

Next year's revenue: $$25,000$

Real interest rate: $4\%$

Depreciation rate: $6\%$

The client is indifferent because the project does not yield any profit above the upfront cost.

Yes, the client should invest because the project yields a $$25,000$ profit.

Yes, the client should invest because the project yields a $$50,000$ profit.

No$,$ the client should not invest because the project yields a $$25,000$ loss.