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	$	36,000
2		66,000
3		96,000
4		96,000
5		116,000

This schedule includes all cash inflows from the project, which will also require an immediate $216,000 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 28 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.)

Net Present Value