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Suppose That a Power Plant Project Requires $10 Million in Period

Question 52

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Suppose that a power plant project requires $10 million in period zero, has operating costs of $1 million per year over 10 years, and brings revenue of $2 million per year over that period of time. Based on this information and the concept of time value of money, comment on whether this is a profit generating project or not?

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If we forget about time value of money, ...

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