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
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
Section: Chapter Questions
Problem 1PS
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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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6b2d2087-0413-432e-842b-e7bfa6e336f7%2F9a635d03-9a72-4b85-a896-c77c014ed789%2Fp20uy0u_processed.png&w=3840&q=75)
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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