Question

Nike is evaluating a direct to consumer model. There is no reason to pay retailers like Dick's Sporting Goods when everything is selling online anyway. One of the things they are going to have to invest in is a return center to handle everything that customers send back. They determine that the return center will cost them $24,000,000 to set up at the beginning of the project (time 0), but will save them money over having pay 3rd party vendors to handle their returns. The ongoing annual operating cost from year 1 to year 8 is $4,000,000 per year which will be savings to them.. What is the NPV of this project at the company MARR Interest rate of 14% for an 8 year project life? O 5,444,300 0 4,449,554 0 -4,965,556 O-5,444,544

Answer 1

Stellement showing Met present value. Year cash flow PUFQ 142 Discounted coach flow after turc 6 [24,099.000) ( 24000pou ) 1-8 4,000000 4.63886389 18,555, 456, 6 5,444, 844 ) ® -5,444544 so correct option eth is correct eo choise for MPV