An orcharder spends $95,000 to plant pomegranate bushes. It will take four years for the bushes to provide a usable crop. He estimates that every year for 20 years after that he will receive a crop worth $11,000 per year. If the discount rate is 8%, what is the net present value (NPV) of this investmem O A. $4.685 O B. - $7,809 OC. $3,123 O P. -$15.617

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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An orcharder spends $95,000 to plant pomegranate bushes. It will take four years for the bushes to provide a usable crop. He estimates that every year for 20 years after that he will receive a crop worth $11,000 per year. If the discount rate is 8%, what is the net present value (NPV) of this investment?
O A. $4,685
O B. - $7.809
O C. $3,123
O D. - $15,617
Transcribed Image Text:An orcharder spends $95,000 to plant pomegranate bushes. It will take four years for the bushes to provide a usable crop. He estimates that every year for 20 years after that he will receive a crop worth $11,000 per year. If the discount rate is 8%, what is the net present value (NPV) of this investment? O A. $4,685 O B. - $7.809 O C. $3,123 O D. - $15,617
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