P&J Expects to Own a Building for Five Years, Then

question 53

Multiple Choice

P&J expects to own a building for five years, then sell it for $1,500,000 net of taxes, sales commissions and other selling costs.P&J's cost of capital is 11%.How much will the sale of the building contribute to the NPV of the project?

• A)$890,177
• B)$1,351,351
• C)$1,500,000
• D)$2,527,587

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