How would the value of such a project change if the interest rate were different, or if the total revenues were the same but the timing were different? First let's look at the same revenue stream with a 10% interest rate. As we can see in the computation to the right, the value of the same project is reduced from $6.68 million to $5.98 million, a $700,000 difference, by the higher interest rate.

    What if the timing of revenues were different? Suppose the $4 million is received in the first rather than the third year?

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