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Star City is considering an investment in the community center that is expected to return the following cash flows: Use Exhibit A.8 YearNet Cash Flow

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Star City is considering an investment in the community center that is expected to return the following cash flows: Use Exhibit A.8 YearNet Cash Flow S 40,000 70,000 100,000 100,000 120,000 This schedule includes all cash inflows from the project, which will also require an immediate $220,000 cash outlay. The city is tax-exempt; therefore, taxes need not be considered. Required: a. What is the net present value of the project if the appropriate discount rate is 25 percent? (Round PV factor to 3 decimal places. Negative amount should be indicated by a minus sign.) b. What is the net present value of the project if the appropriate discount rate is 15 percent? (Round PV factor to 3 decimal places. Negative amount should be indicated by a minus sign.)

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