Figure 2: financial data

- First year revenues: $11000

- Second year revenues: $15000

- Expenses (including depreciation): $100,000 per year

- Initial time-zero (net) fixed assets: $40000

- Depreciation: 10% of beginning of year net fixed assets

- Accounts payable (year 1 and 2): $500

- Corporate marginal tax: 30%

- Accurred expenses (year 1 and 2): $100

- Required cash: $2000

Using a 30% discount rate for the first two years and a $2000000 terminal value, what is the value of the venture at its launch:

(a) NPV=$1000735,4

(b) NPV=$1008652,8

(c) NPV=$1028804,8

(d) NPV=-$1028804,8

(e) NPV=$1068604,4

Correct answer: (c)