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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. Year 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.

Year Net Cash Flow
1 $ 34,000
2 64,000
3 94,000
4 94,000
5 114,000

This schedule includes all cash inflows from the project, which will also require an immediate $214,000 cash outlay. The city is tax-exempt; therefore, taxes need not be considered.

a. What is the net present value of the project if the appropriate discount rate is 24 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 14 percent? (Round PV factor to 3 decimal places. Negative amount should be indicated by a minus sign.)

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