Net Present Value: Cortez Art Gallery Is Adding to Its

question 20

Multiple Choice

Net present value: 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?

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

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