1. Power Engine, Inc. is considering the following two investment proposals:

	Proposal X	Proposal Y
Investment	$738,000	$508,000
Useful life	5 years	4 years
Estimated annual net cash inflows received at the end of each year	$152,000	$100,000
Residual value	$62,000	$0
Depreciation method	Straight-line	Straight-line
Annual discount rate	10%	9%

Compute the present value of the future cash inflows from Proposal Y. Present value of an ordinary annuity of $1:

	8%	9%	10%
1	0.926	0.917	0.909
2	1.783	1.759	1.736
3	2.577	2.531	2.487
4	3.312	3.240	3.170
5	3.993	3.809	3.791
6	4.623	4.486	4.355

Select one:

A.

$324,000

B.

$271,018

C.

$294,640

D.

$254,000