Star City is considering an investment in the community center that is expected to return the following cash flows: Use Exhibit A.8. Year 1 2 Net Cash Flow $ 26,000 56,000 86,000 86,000 106,000 3 4 5 This schedule includes all cash inflows from the project, which will also require an immediate $206,000 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? (Round PV factor to 3 decimal places. Negative amount should be indicated by a minus sign.) Net present value b. What is the net present value of the project if the appropriate discount rate is 8 percent? (Round PV factor to 3 decimal places. Negative amount should be indicated by a minus sign.) 69 1 2 3 4 5 6 7 8 9 11 12 13 Exhibit A.8 Present Value of $1 Year 5% 8% 10% 12% 14% 15% 16% 18% 20% 0.952 0.943 0.926 0.909 0.893 0.877 0.870 0.862 0.847 0.833 0.907 0.890 0.857 0.826 0.797 0.769 0.756 0.743 0.718 0.694 0.864 0.840 0.794 0.751 0.712 0.675 0.658 0.641 0.609 0.579 0.823 0.792 0.735 0.683 0.636 0.592 0.572 0.552 0.516 0.482 0.784 0.747 0.681 0.621 0.567 0.519 0.497 0.476 0.437 0.402 0.746 0.705 0.630 0.564 0.507 0.456 0.432 0.410 0.370 0.335 0.711 0.665 0.583 0.513 0.452 0.400 0.376 0.354 0.314 0.279 0.677 0.627 0.540 0.467 0.404 0.351 0.327 0.305 0.266 0.233 0.645 0.592 0.500 0.424 0.361 0.308 0.284 0.263 0.225 0.194 10 0.614 0.558 0.463 0.386 0.322 0.270 0.247 0.227 0.191 0.162 0.585 0.527 0.429 0.350 0.287 0.237 0.215 0.195 0.162 0.135 0.557 0.497 0.397 0.319 0.257 0.208 0.187 0.168 0.137 0.112 0.530 0.469 0.368 0.290 0.229 0.182 0.163 0.145 0.116 0.093 14 0.505 0.442 0.340 0.263 0.205 0.160 0.141 0.125 0.099 0.078 15 0.481 0.417 0.315 0.239 0.183 0.140 0.123 0.108 0.084 0.065 Year 22% 24% 25% 26% 28% 30% 32% 34% 35% 40% 0.820 0.806 0.800 0.794 0.781 0.769 0.758 0.746 0.741 0.714 0.672 0.650 0.640 0.630 0.610 0.592 0.574 0.557 0.549 0.510 0.551 0.524 0.512 0.500 0.477 0.455 0.435 0.416 0.406 0.364 0.451 0.423 0.410 0.397 0.373 0.350 0.329 0.310 0.301 0.260 5 0.370 0.341 0.328 0.315 0.291 0.269 0.250 0.231 0.223 0.156 0.303 0.275 0.262 0.250 0.227 0.207 0.189 0.173 0.165 0.133 0.249 0.222 0.210 0.198 0.178 0.159 0.143 0.129 0.122 0.095 0.204 0.179 0.168 0.157 0.139 0.123 0.108 0.096 0.091 0.068 0.167 0.144 0.134 0.125 0.108 0.094 0.082 0.072 0.067 0.048 10 0.137 0.116 0.107 0.099 0.085 0.073 0.062 0.054 0.050 0.035 0.112 0.094 0.086 0.079 0.066 0.056 0.047 0.040 0.037 0.025 0.092 0.076 0.069 0.062 0.052 0.043 0.036 0.030 0.027 0.018 0.075 0.061 0.055 0.050 0.00 0.033 0.027 0.022 0.020 0.013 1 2 3 4 6 7 8 9 11 12 13 14 0.062 0.049 0.044 0.039 0.032 0.025 0.021 0.017 0.015 0.009 15 0.051 0.040 0.035 0.031 0.025 0.020 0.016 0.012 0.011 0.006