Question: Please show how to do this problem as if it was asking for annuity due instead A company has a project to install a new

Please show how to do this problem as if it was asking for annuity due instead

A company has a project to install a new production line. This project will finish after two years. Then the firm would anticipate the first annual cash flow from this project to be $

1

million, one year after the production line is installed. Suppose the production line will work without extra costs for

5

years, and the annual cost of capital

(r)

3.5

percent. Calculate the present value of this project.

Please show how to do this problem as if it was

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