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A manufacturer of video games develops a new game over two years. The game costs $830,000 per year with one payment made immediately and the
A manufacturer of video games develops a new game over two years. The game costs $830,000 per year with one payment made immediately and the other at the end of two years (no cash flow during the first year). When the game is released in two years, it is expected to make $1,300,000 at the end of each year for three years after that. What is the Net Present Value (NPV) of this decision if the cost of capital is 11.00%? A) $2,240,000 B) $876,402 C) $950,349 D) $805,663 E) $1,074,739
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