Net Present Value: Lady Grey Enterprises Plans to Build a New

question 83

Multiple Choice

Net present value: Lady Grey Enterprises plans to build a new plant at a cost of $3,250,000. The plant is expected to generate annual cash flows of $1,225,000 for the next five years. If the company's required rate of return is 18 percent, what is the NPV of this project?

• A) $2,785,000
• B) $3,830,785
• C) $580,785
• D) $2,122,875

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