The NPV of a New Video Game, Dexa 1, Is

question 10

Multiple Choice

The NPV of a new video game, Dexa 1, is −1.5 million after discounting all expected cash flows. However, if high demand in the market evolves, Dexa 2 is a possible follow-on opportunity in two years. In two years it will cost 10 million to start Dexa 2, which will produce 9 million of cash flow in year 2. N(d1) = 0.5785 and N(d2) = 0.1755. The annual interest rate is 11 percent and equals the risk-free rate. What is the Dexa 1 APV?

• A)$1.95 million
• B)$1.30 million
• C)$2.28 million
• D)$2.80 million

Understand the behavior of fixed and variable costs in relation to production levels.

Distinguish between committed and discretionary fixed costs.

Identify the characteristics and examples of variable costs.

Understand the concept of the relevant range and its application to costs.

---

Definitions:

Creative Productivity

Refers to the ability to produce work that is both novel and useful in artistic, academic, or professional contexts.

Intervention Programs

Structured programs designed to alter or modify problematic behaviors or address challenging conditions through targeted actions.

Academic Performance

The extent to which a student has achieved their learning objectives, often measured through grades and test scores.

Auditory Information

Sounds and other acoustic signals that are processed by the ear and interpreted by the brain.