Question
Star City is considering an investment in the community center that is expected to return the following cash flows. Use Exhibit A.8. Net Cash
Star City is considering an investment in the community center that is expected to return the following cash flows. Use Exhibit A.8. Net Cash Flow Year 1 $ 21,000 2 51,000 81,000 4 81,000 101,000 This schedule includes all cash inflows from the project, which will also require an immediate $201,000 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 18 percent? b. What is the net present value of the project if the appropriate discount rate is 8 percent? Complete this question by entering your answers in the tabs below. Required A Required B What is the net present value of the project if the appropriate discount rate is 18 percent? (Round PV factor to 3 decimal places. Negative amount should be indicated by a minus sign.) Net present value
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