SAP Inc Received a $1

question 13

Multiple Choice

SAP Inc. received a $1.5 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 $500,000 a year on storm water clean-up efforts. If SAP is able to sign up and retain four shipyards in the first year onwards, what is the present value (PV) of the project (net of investment) if the cost of capital for SAP is 14% per year? Assume a cost of operations and other costs for SAP equal 50% of revenue.

• A) $4.51 million
• B) $4.80 million
• C) $5.93 million
• D) $5.64 million

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Definitions:

Foreign Keys

A field in a database table that uniquely identifies a row in another table, establishing a link between the two.

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Knowledge Management Systems (KMSs) are systems that help in collecting, organizing, sharing, and analyzing an organization's knowledge in terms of documents, procedures, and policies.

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