Question
The Cambro Foundation, a nonprofit organization, is planning to invest $174,843 in a project that will last for three years. The project will produce net
The Cambro Foundation, a nonprofit organization, is planning to invest $174,843 in a project that will last for three years. The project will produce net cash inflows as follows:
Year 1: $74,000
Year 2: $87,000
Year 3: ?
The project will yield a 8% rate of return, what is the expected net cash inflow for Year 3?
I know you have to use the chart(s) to get the data, so I've included the data under the column for 8% below.
Exhibit 8B-1 (Present Value of $1):
8%
Period 1: 0.926
Period 2: 0.857
Period 3: 0.794
Exhibit 8B-2 (Present Value of an Annuity of $1 Arrears):
8%
Period 1: 0.926
Period 2: 1.783
Period 3: 2.577
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