A Manufacturer of Video Games Develops a New Game Over

Multiple Choice

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%?

A) $991,220
B) $1,071,432
C) $1,564,559
D) $1,841,093
E) $1,234,870