Oakshott - Chapter 3 (p. 51) Practice questions: 9 What is the present value of 50 000 that is payable in 5 years' time if interest rates are expected to be constant at 6% during this period? (Depending on how much decimal places you keep during your computation, the last digit of the solution could be slightly different.) Select one: a. 37365 b. 66908 C. 45987 d. 32578 Example 16.1: Consider the following cash flows. Year Investment A Investment B 0 --20 -15 1 12 Jolo 2 10 3 5 5 4 3 5 5 0 5 (i) Use the payback method to determine which one of A and B is the better investment opportunity. Select one: a. A b. B Refer to Example 16.1 above. (ii) Find the accounting rate of return (ARR) for Investment A. Select one: a. 60% b. 33% @ c. 25% d. 30% e. 45% NPV Method: Using the cash flows given in the table below, find the NPV of Investment A. Assume a discount rate of 6% The first step should be finding the discount factors. Keep 4 decimal places for discount factors. (For example. 0.8765.) year 0 Investment A -20 12 1 2 10 Select one: a. 5038 b. 2208 C 2806 d. 3356 e. 6012