1.

Present Value of an Annuity of 1
Periods	8%	9%	10%
1	.926	.917	.909
2	1.783	1.759	1.736
3	2.577	2.531	2.487

A company has a minimum required rate of return of 8%. It is considering investing in a project that costs $65116 and is expected to generate cash inflows of $26000 each year for three years. The approximate internal rate of return on this project is

9%.

11%.

10%.

less than the required 8%.

2.If a project has a salvage value greater than zero, the salvage value will

decrease the net present value.

increase the net present value.

increase the payback period.

have no effect on the net present value.