Sinatra Systems is setting up to manufacture a new line of video console games in Las Vegas.

Question:

Sinatra Systems is setting up to manufacture a new line of video console games in Las Vegas. The cost of the manufacturing equipment is

$1,750,000. Expected cash flows over the next 4 years are $725,000,

$850,000, $1,200,000, and $1,500,000. Given the project’s required rate of return of 15%, the NPV of this project is

a. $1,169,806

b. $2,919,806

c. $2,525,000

d. $3,122,607

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