SAP Inc. received a $2 million grant under its Small Business Innovation program. SAP invested the...
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SAP Inc. received a $2 million grant under its Small Business Innovation program. SAP invested the grant money
and developed a system to remove metal contaminants from storm water in shipyards. The firm estimates that each
shipyard spends $600,000 a year on storm water clean-up efforts. If SAP is able to sign up and retain four shipyards
from the first year onwards, what is the present value (PV) of the project (net of investment) if the cost of capital for
SAP is 14% per year? Assume a cost of operations and other costs for SAP equal 60% of revenue.
Answer rating: 100% (QA)
To calculate the present value PV of the project net of investment we need to consider the grant recView the full answer