The manufacture of folic acid is a competitive business.A new plant costs $100,000 and lasts for three years.The cash flow from the plant is as follows: year 1: +$43,300,year 2: + $$43,300,and year 3 = +$58,300.(Assume no taxes.) If the discount rate is 20%,what is the value of the plant at the end of year 2? Round to the nearest $100.
A) $48,600
B) $38,520
C) -$51,600
D) zero
Correct Answer:
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