1. Osler Company is considering an investment with the following data:

Initial cost	$200,000
Annual net cash inflows	$25,000
Expected life	10 years
Salvage value	none

Depreciation will be taken on a straight-line basis over the expected life of the investment.

The company requires a minimum rate of return of 4%. What is the net present value of the investment?

Period	1	2	3	4	5	6	7	8	9	10
4%	0.962	1.886	2.775	3.630	4.452	5.242	6.002	6.773	7.435	8.111

Group of answer choices

($81,830)

$118,170

$2,775

$202,775

.

2. Buster Evans is considering investing $20,000 in a project with the following annual cash revenues and expenses:

	Cash	Cash
	Revenues	Expenses
Year 1	$ 8,000	$ 8,000
Year 2	$12,000	$ 8,000
Year 3	$15,000	$ 9,000
Year 4	$20,000	$10,000
Year 5	$20,000	$10,000

Depreciation will be $4,000 per year. What is the accounting rate of return on the investment?

Group of answer choices

35%

70%

75%

15%

None of these.

.

3. Five mutually exclusive projects had the following information:

	V	W	X	Y	Z
NPV	$(3,000)	$56,000	$23,000	$14,000	$28,000
IRR	7%	10%	15%	13%	6%

Which project is preferred?

Group of answer choices

Project V

Project X

Project W

Project Y