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 $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