the promoters of the Madison Square Garden project have suggested that with additional expenditures on marketing and ongoing upgrades during the first four years of the new facility's use, the revenue could be raised from $100 million and the facility would retain a residual value after 30 years of $4 million. They project cash flow, net of on-going investments to be as follows:  Years 1- 5 = negative $50 million  Years 5 - 10 = positive $200 million  Years 11 - 20 = positive $250 million  Years 21 - 30 = $100 million (due to maintenance costs) Residual market value in year 30 = $4 million They also anticipate that the increased cost of the project would raise the interest rate to 6%. How good is this investment?

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To evaluate the investment in the Madison Square Garden project we can calculate the Net Present Val... View the full answer