Coaching Actuaries is considering a project to produce actuarial toys. You are given: The initial investment is $1 million. The machinery will last for 5 years, at which point the project ends and all cash flows cease. The toys will sell for $100 apiece. The same number of toys will be sold each year. The fixed costs are $100,000 per year, while the variable costs are $25 apiece. The cost of capital is 10%.