15. Use the following table, Present Value of an Annuity of 1

Period 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 10% and is considering investing in a project that requires an investment of $99,000 and is expected to generate cash inflows of $42,000 at the end of each year for three years. The present value of future cash inflows for this project is: (Answer: $104,454)

16. Use the following table, Present Value of an Annuity of 1

Period 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% and is considering investing in a project that costs $175,000 and is expected to generate cash inflows of $70,000 at the end of each year for three years. The net present value of this project is: (Answer: $5,390)