1. Peng Company is considering an investment expected to generate an average net income after taxes of $2,000 for three years. The investment costs $45,300 and has an estimated $7,500 salvage value. Assume Peng requires a 10% return on its investments. Compute the net present value of this investment. Assume the company uses straight-line depreciation. (PV of $1, FV of $1, PVA of $1, and FVA of $1)

Cash Flow	Select Chart	Amount	x	PV Factor	=	Present Value
Annual cash flow	Present Value of an Annuity of 1				=	$0
Residual value	Present Value of 1				=	0
	Net present value

2. A company is considering investing in a new machine that requires a cash payment of $61,949 today. The machine will generate annual cash flows of $24,911 for the next three years.

What is the internal rate of return if the company buys this machine?

Amount Invested	0	Annual Net Cash Flow	=	Present Value Factor
			=	0
Internal Rate of Return

3. A company is investing in a solar panel system to reduce its electricity costs. The system requires a cash payment of $111,174.60 today. The system is expected to generate net cash flows of $9,539 per year for the next 35 years. The investment has zero salvage value.The company requires an 7% return on its investments.

3-a. Compute the net present value of this investment.

	Chart Values are Based on:
	n =
	i =	7%
Cash Flow	Select Chart	Amount	x	PV Factor	=	Present Value
Annual cash flow					=	$0.00
	Net present value

3-b. Should the project be accepted?