Problem:
Jamaica Corp. is adding a new assembly line at a cost of $8.5 million. The firm expects the project to generate cash flows of $2 million, $3 million, $4 million, and $5 million over the next four years. Its cost of capital is 16 percent. Net present value:
Required:
Question: What is the net present value of this project.
Note: Show supporting computations in good form.