Imaging you want to invest in a project with a lifetime of 5 years. The revenue of this project comes from selling products. Initiating the project requires $100,000 investment on non-depreciable assets with no salvage value. The operating cost is estimated as $50,000 in the first year (at the end of the interval). You expect to produce and sell 1000 units of products per year (consider the revenue at the end of intervals). Operating cost and products unit price will increase at the rate of average inflation which is estimated to be 5% over the lifetime of the project.

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