>That’s approximately a 3% annualized return on investment (1.03^75 ~= 10).
That isn’t accurate, the cash flows should according discounted by the period they’re received in (this contract produces some profits in year 1, more in year 2, etc). What you’ve done is treated it as if the 10x payment is received all at once in year 75.
That isn’t accurate, the cash flows should according discounted by the period they’re received in (this contract produces some profits in year 1, more in year 2, etc). What you’ve done is treated it as if the 10x payment is received all at once in year 75.