A Manufacturer of Video Games Develops a New Game Over

question 33

Multiple Choice

A manufacturer of video games develops a new game over two years. This costs $850,000 per year with one payment made immediately and the other at the end of two years. When the game is released, it is expected to make $1.2 million per year for three years after that. What is the net present value (NPV) of this decision if the cost of capital is 9%?

• A) $991,220
• B) $1,071,432
• C) $1,841,093
• D) $1,564,559

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Definitions:

Protein

Essential nutrients that are vital for building, maintaining, and repairing tissues, cells, and organs throughout the body.

Whole-Grain

Refers to grains that have all of their parts intact: the bran, germ, and endosperm, providing more nutrients and fiber.

Fructose

A simple sugar found in many plants that is sweeter than glucose and used in various foods and beverages.

Sorghum

A grain that serves as both food and fodder, known for its drought tolerance and nutritional value.