Expected Net Present Value

# Problem

Given:

A risky project costs $20 million, which would be paid in year 0 If the project succeeds, it will produce$5 million of benefits every year starting in year 11
If the project fails, it will produce no benefits
The chance of success is 60%
The interest rate is 5%

Determine:

The expected net present value of the project.

URL: https://wilcoxen.maxwell.insightworks.com/pages/3568.html
Peter J Wilcoxen, The Maxwell School, Syracuse University
Revised 12/08/2011