A New Grocery Store Requires $50 Million in Initial Investment

question 11

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.What is the NPV of the project at a discount rate of 10%?

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

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