A manufacturer of video games develops a new game over two years. This costs $830,000 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 make $1.20 million per year for three years after that. What is the net present value (NPV) of this decision if the cost of capital is 10%?
A) $950,349
B) $1,045,384
C) $1,520,559
D) $1,805,663
Answer: A
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CRSs are internal systems shared by member hotels.
a. true b. false
Which of the following statements regarding annuities is NOT correct?
A) Pure life annuities provide income as long as the annuitant lives; benefits terminate at death. B) An annuity can be classified as immediate or deferred, depending on when benefit payments begin. C) Annuities that pay benefits in specified dollar amounts are fixed annuities; annuities that pay benefits in relation to units are variable annuities. D) An installment refund annuity guarantees a specific amount of benefits, payable to the annuitant only; if death occurs before total payout, an amount equal to all premiums is refunded to the annuitant's estate or beneficiary.