What is the net present value of this decision

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Reference no: EM13911241

A manufacturer of video games develops a new game over two years. This costs $850,000 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 $1.2 million per year for three years after that. What is the net present value (NPV) of this decision if the cost of capital is 9%?

1) $991,220

2) $1,071,432

3) $1,564,559

4) $1,841,093

Reference no: EM13911241

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