8. Barnes' Bagles is considering manufacturing and selling a new bagel-shaped pizza-thick with a hole...
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8. Barnes' Bagles is considering manufacturing and selling a new bagel-shaped pizza-thick with a hole in the middle. Development will cost $100,000 and will take one year. If the pizzas are popular ( 80% probability) the cash flows will be $40,000 per year for 5 years starting in Year 1 . If the pizzas are not a hit (20\% probability) the cash flows will be $5,000 per year for 5 years. Calculate the ENPV of the project. Barnes' cost of capital is 10%. a. $18,855 b. $20,740 c. $22,815 d. $25,096 correct answer e. $27,606
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