Answered

Get the answers you need at Westonci.ca, where our expert community is always ready to help with accurate information. Discover the answers you need from a community of experts ready to help you with their knowledge and experience in various fields. Our platform provides a seamless experience for finding reliable answers from a network of experienced professionals.

SAP Inc. received a $1.5 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 in the first year onwards, what is the present value (PV) of the project (net of investment) if the cost of capital for SAP is 14% per year

Sagot :

Parrain

Answer: $12,785,714

Explanation:

Present value of project:

= Revenue / Cost of capital

= (500,000 * 4 shipyards) / 14%

= $14,285,714

Net of investment:

= 14,285,714 - 1,500,000

= $12,785,714

Thanks for using our platform. We aim to provide accurate and up-to-date answers to all your queries. Come back soon. We hope you found what you were looking for. Feel free to revisit us for more answers and updated information. Discover more at Westonci.ca. Return for the latest expert answers and updates on various topics.