SAP IncReceived a $2 Million Grant Under Its Small Business Innovation

question 4

Multiple Choice

SAP Inc.received a $2 million grant under its Small Business Innovation program.SAP invested the grant money and developed a system to remove metal contaminants from storm water in shipyards.The firm estimates that each shipyard spends $600,000 a year on storm water clean-up efforts.If SAP is able to sign up and retain four shipyards from the first year onwards,what is the present value (PV) of the project (net of investment) if the cost of capital for SAP is 15% per year? Assume a cost of operations and other costs for SAP equal 40% of revenue.

• A)$6.3 million
• B)$6.7 million
• C)$7.6 million
• D)$7.9 million
• E)$8.3 million

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Definitions:

Indirect Approach

A communication strategy that addresses the main point or request after providing background information, often used to soften the impact.

Opening

The initial part or phase of an event, activity, or period of time, often setting the tone for what follows.

Defamation

The act of damaging someone's reputation by making false and harmful statements.

Direct Approach

A straightforward and candid way of dealing with situations or communicating with others, without evading or being indirect.