Question: A mining operation on Mars is expected to incur an immediate expense of $1,000,000,000 and produce profits beginning 10 years from now of $250,000,000 per
A mining operation on Mars is expected to incur an immediate expense of $1,000,000,000 and produce profits beginning 10 years from now of $250,000,000 per year indefinitely into the future. Should this investment be made if your rate of time discounting is 10%? (To be clear: you would pay 1 billion now, and then receive the first payment of 250 million 10 years from now, to be followed each year with another 250 million).
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