Net Present Value: Niche Entertainment Systems Is Setting Up to Manufacture

question 23

Multiple Choice

Net present value: Niche Entertainment Systems is setting up to manufacture a new line of video game consoles. The cost of the manufacturing equipment is $1,750,000. Expected cash flows over the next four years are $725,000, $850,000, $1,200,000, and $1,500,000. Given the company's required rate of return of 15 percent, what is the NPV of this project?

• A) $1,169,806
• B) $2,919,806
• C) $2,525,000
• D) $3,122, 607

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