Evergreen Outdoor School (EOS) has a chance to invest $10,000 in a project that is certain to pay $4,500 at the end of each of the next three years. The minimum desired rate of return is 10 percent. 

1. What is the project’s net present value? 

2. Show that EOS would be equally well off undertaking the project as having its present value in cash. Do this by calculating the cash available at the end of three years if (a) $10,000 is borrowed at 10 percent, with interest paid at the end of each year, and the investment is made, or (b) cash equal to the project’s NPV is invested at 10 percent compounded annually for three years. Use the following formats. Year 1 for the first alternative is completed for you. 

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Alternative (a)–Invest in Project (2) (4) (1) (3) (5) (3) ?(4) Loan Interest Loan (1) + (2) Cash for Balance at at 10% Accumulated Repayment Balance at End of Year Beginning of Year Amount at End per Year of Loan of Year Year $10,000 $1,000 $11,000 $4,500 $6,500 3 Alternative (b)–Keep Cash (2) (1) (3) Interest at (1) + (2) Accumulated Amount at End of Year Investment Balance at Year 10% per Year Beginning of Year 3