What is the npv of the new video game, Finance Basics

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What is the npv of the new video game

Problem

M.C.P Games, Inc., has hired you to perform a feasibility study of a new video game that requires a $7,000,000 initial investment in equipment. M.V.P. expects a total annual operating cash flow of $1.3 million for the next 10 years. The relevant discount rate is 10%. Cash flows occur at the end of the year. Assume the corporate tax rate is 0%.

• What is the NPV of the new video game?

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