A New Grocery Store Requires $50 Million in Initial Investment

question 63

Multiple Choice

A new grocery store requires $50 million in initial investment. You estimate that the store will generate $5 million of after-tax cash flow each year for five years. At the end of five years, it can be sold for $60 million (ignore taxes) . What is the NPV of the project at a discount rate of 10 percent?

• A)$2.42 million
• B)$10.82 million
• C)$6.21 million
• D)$2.82 million

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Definitions:

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Change in pubertal hormone levels that causes adolescents’ sleep patterns to shift such that they tend to remain awake late at night and groggy early in the morning.

Melatonin

A hormone that influences sleep.

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An unusually high level of cortisol in the body, often associated with stress, which can lead to various health problems.