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18. A video game company develops a new game over two years. This costs $820,000 per year, with one payment made immediately and the other
18. A video game company develops a new game over two years. This costs $820,000 per year, with one payment made immediately and the other at the end of two years. When the game is released, it is expected to generate cash flows of $1.10 million per year for three years, paid at the end of years 3, 4, and 5. What is the net present value (NPV) of this opportunity if the cost of capital is 8.5%
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