A Manufacturer of Video Games Develops a New Game Over

question 22

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)$1,564,559
• D)$1,841,093
• E)$1,234,870

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Definitions:

Social Classes

Categories of individuals in a society grouped based on their economic status, occupation, and associated social practices, which can affect their life opportunities and experiences.

Intelligence

Intelligence is the capacity for logic, understanding, self-awareness, learning, emotional knowledge, reasoning, planning, creativity, and problem-solving.

Ethnic Differences

Variations in practices, cultures, norms, and values among different ethnic groups within a larger community or society.

Arthur Jensen

A psychologist known for his work in the study of intelligence and his controversial views on the influences of race on intelligence.