Cortez Art Gallery Is Adding to Its Existing Buildings at a Cost

question 80

Multiple Choice

Cortez Art Gallery is adding to its existing buildings at a cost of $2 million. The gallery expects to bring in additional cash flows of $520,000, $700,000, and $1,000,000 over the next three years. Given a required rate of return of 10 percent, what is the NPV of this project? (Do not round intermediate computations. Round final answer to nearest dollar.)

• A) $1,802,554
• B) $197,446
• C) -$1,802,554
• D) -$197,446

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Definitions:

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A significant or sudden advance or discovery that changes the way a particular issue is understood or addressed.

Brainstorming

A creative group problem-solving technique where participants spontaneously share ideas or solutions without judgment to stimulate innovation and find solutions.

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An unplanned gathering of individuals for the purpose of discussing topics or issues freely without predefined structure or roles.

Serendipity

The occurrence of events by chance in a happy or beneficial way.