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Famwam Famwam
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4 years ago
SAP Inc. received a $1 million grant under its Small Business Innovation program.  SAP invested the grant money and developed a system to remove metal contaminants from storm water in shipyards.  The firm estimates that each shipyard spends $500,000 a year on storm water clean-up efforts.  If SAP is able to sign up and retain four shipyards from the first year onwards, what is the present value (PV) of the project (net of investment) if the cost of capital for SAP is 18% per year? Assume a cost of operations and other costs for SAP equal 50% of revenue.

▸ $5.32 million

▸ $4.56 million

▸ $5.87 million

▸ $4.98 million
Textbook 
Fundamentals of Corporate Finance

Fundamentals of Corporate Finance


Edition: 2nd
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Nikki_LYNNNikki_LYNN
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4 years ago
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Famwam Author
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4 years ago
Thanks for your help!!
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This helped my grade so much Perfect
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