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18) Gamma Corp. is considering an investment opportunity with the following expected net cash inflows: Year 1, $250,000; Year 2, $350,000; Year 3, $395,000. Residual

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18) Gamma Corp. is considering an investment opportunity with the following expected net cash inflows: Year 1, $250,000; Year 2, $350,000; Year 3, $395,000. Residual value of the investment would be $50,000. The company uses a discount rate of 12%, and the initial investment is $400,000. Calculate the NPV of the investment. (8 marks) Present value of $1 12% 0.893 0.797 0.712 0.659 0.636 0.567 11% 0.901 0.812 0.731 14% 0.877 0.769 0.693 0.675 0.592 13% 0.885 0.783 2 0.613 0.543 0.593 0.519

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