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Below is a table for the present value of $1 at compound interest. Year 6% 10% 12% 1 0.943 0.909 0.893 2 0.890 0.826 0.797

Below is a table for the present value of $1 at compound interest.

Year

6%

10%

12%

1

0.943

0.909

0.893

2

0.890

0.826

0.797

3

0.840

0.751

0.712

4

0.792

0.683

0.636

5

0.747

0.621

0.567

Below is a table for the present value of an annuity of $1 at compound interest.

Year

6%

10%

12%

1

0.943

0.909

0.893

2

1.833

1.736

1.690

3

2.673

2.487

2.402

4

3.465

3.170

3.037

5

4.212

3.791

3.605

Using the tables above, if an investment is made now for $23,500 that will generate a cash inflow of $8,000 a year for the next 4 years, what would be the net present value of the investment, assuming an earnings rate of 10%?

a.$25,360

b.$16,050

c.$23,500

d.$1,860

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