Techie, Inc. may invest $5 million in a new Star Communicator project. Annual production costs and revenues are projected to be $2 million and $1.5 million, with each growing at 2.0% and 4.0%,

respectively. At an interest rate of 5.5%, what is the approximate investment year that will maximize value? (Use static analysis.)

A)

Year 20

B)

Year 15

C)

Year 10

D)

Year 5

Answer:

A

Business

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