Question: Consider a project costing $1m each year from year 1 to year T. Then starting in year T+1, the project will generate a profit of

Consider a project costing $1m each year from year 1 to year T. Then starting in year T+1, the project will generate a profit of $700k each year, forever. a) Write a formula for the present value of this project with a discount rate of r b) Write a formula in terms of r for the value of T at which you break even (ignoring the issue of whether T is an integer).

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