So I've been reading the 5th edition of Valuation by McKinsey and I have a question. In Ch 2 Fundamental Principles of Value Creation - Cash flow risk pg 36.

**Deciding how much cash flow risk to take on** What should companies look out for? Consider an example, Project A requires an up-front investment of $2000. If everything goes well with the project, the company earns $1000 per year forever. If not, the company gets zero. (Such all or nothing projects are not unusual). To value Project A, finance theory directs you to discount the expected cash flow at the cost of capital. But what is the expected cash flow in this case? If there is a 60 percent chance of everything going well, the expected cash flows would be $600 per year. At a 10 percent cost of capital, the project would be worth $6000 once completed. Subtracting the $2000 investment, the net value of the project the investment is made is $4000.

This is probably a basic question to most of you. Trying to understand everything slows me down a lot in trying to figure how these stuff works.

How did he get $6000? Is 10 percent cost of capital the same as the DCF discount rate in this case?