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Question
Third State Bank wants to add a new branch office. It has determined that the cost of construction of the new facility will be $1.5 million with another $500,000 in organizational costs. The bank has estimated that it will generate $319,522 per year in net revenues for 20 years. If Third State requires a 17% return on its money, what is this project's net present value?
A. $201,805
B. -$201,805
C. $1,798,195
D. -$1,798,195
E. $298,195
Answer
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