1. Big Box Real Estate is considering two sites for its latest development project, a mixed-use retail shopping center. The companys management has put together the following cash flow estimates and other data for each project:

		Site 1		Site 2
		Cedar Park		Round Rock
Land and construction costs		$5,000,000		$6,500,000
Annual cash inflows		680,000		715,000
Annual cash outflows		96,000		120,000
Estimated useful life (in years)		20		25
Interest rate		10%		8%

The company expects the Cedar Park site to have a $2,000,000 salvage value at the end of its useful life and the Round Rock site to have a $3,000,000 salvage value at the end of its useful life. What is the net present value (NPV) of each site

2. Assuming that you are 20 years old and want to retire a millionaire when you turn 65, how much must you deposit each year to reach your goal if your investment account averages an 8% return?

3. The Montana Company has decided to invest in a project that is expected to produce the following cash flows: 9,000 (year 1), 12,500 (year 2) and 14,000 (year 3). The project would require a $29,000 initial investment. Assuming an interest of 8 percent, what is the net present value (NPV) of the project? What is the present value index of the project?