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Question 5. (in-class example) GM has just designed a new Saturn. It forecasts sales of 200,000 cars per year at an average price of $18,000.

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Question 5. (in-class example) GM has just designed a new Saturn. It forecasts sales of 200,000 cars per year at an average price of $18,000. Costs are expected to be $17,000/ car. The model will sell for 4 years and GM expects an inventory of 40,000 cars. The cost of capital is fixed at 10%/year. What is the NPV of the project (choose the most accurate answer)? * $680,000 $800,000 $880,000 O $1,280,000 O None of the above

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