Using Present Value Dollars

You are trying to decide if you should build a factory or simply leave the money inthe bank collecting interest. It will cost $9M to build the factory ($3m/year) andthree years of time. Assume the factory will run for 20 years after that and generate$1M per year in profit each year. Assume a discount/interest rate of 4%. Should youbuild the factory or leave the money in the bank at a 3% interest rate?

Ps( 1 + d)2