The company desires a 6% return on investments and the cash to be received in one year is $10,000. Determine the present value of the $10,000 (which will be the amount the company will be willing to pay today), using the following partial table of present value of $1 at compound interest:

Year	6%	10%	12%
1	.943	.909	.893
2	.890	.826	.797
3	.840	.751	.712
4	.792	.683	.636

$9,000

$9,430

$9,090

$8,930

2. When a company is comparing several investments with different amount of initial investment amounts, the decision should be made on the basis of the

highest total cash inflows

highest NPV

shortest payback period

highest profitability index

3. The desirability of a capital investment depends on it ability to generate

differential cost

net cash inflows

a payback of 1

returns greater than 4%