Star City is considering an investment in the community center that is expected to return the following cash flows: UseExhibit A.8.

Year Net Cash Flow

1 $37,000

2 67,000

3 97,000

4 97,000

5 117,000

This schedule includes all cash inflows from the project, which will also require an immediate $217,000 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 26 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 10 percent?