1. Accelerated Finance is deciding whether to purchase new accounting software. The cost of the software package is $59,000, and its expected life is ten years. The payback for this investment is four years. Assuming equal yearly cash inflows, what are the expected annual net cash savings from the new software? (Assume the investment has no residual value.)

A.$5,900

B.$14,750

C.$236,000

D.$44,250

2. When computing the present value, the interest rate will vary depending on the amount of risk. Riskier investments, such as FDICinsured bank deposits, command higher interest rates.

True

False

3. Brooks Company will receive $10,000 a year at the end of each of the next five years. Using a discount rate of 14%, the present value of the receipts can be stated as ________.

A. PV = $10,000 (PV factor, i = 14%, n = 5)

B. PV = $10,000 (FV factor, i = 14%, n = 5)

C. PV = $10,000 (Ordinary Annuity PV factor, i = 14%, n = 5)

D. PV = $10,000 (Ordinary Annuity FV factor, i = 14%, n = 5)