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A Farmer Sows a Certain Crop

Question 121

Multiple Choice

A farmer sows a certain crop. It costs $240,000 to buy the seed, prepare the ground, and sow the crop. In one year's time it will cost $93,200 to harvest the crop. If the crop will be worth $350,000, and the interest rate is 7%, what is the net present value (NPV) of this investment?


A) $240,000
B) $87,103
C) $0
D) $567,103

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