Annual cash inflows that will arise from two competing investment projects are given below:

YearInvestment AInvestment B1$ 3,000$ 6,00024,0005,00035,0004,00046,0003,000 $ 18,000$ 18,000

The discount rate is 8%.

Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables.

Required:

Compute the present value of the cash inflows for each investment.

In eight years, when he is discharged from the Air Force, Steve wants to buy a $16,000 power boat.

Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables.

Required:

What lump-sum amount must Steve invest now to have the $16,000 at the end of eight years if he can invest money at: (Round your final answer to the nearest whole dollar amount.)