This project requires an initial investment of $186,120. The project will have a life of 4 years. Annual revenues associated with the project will be $75,000 and expenses associated with the project will be $15,000 for an annual net cash flow of $ .

Note: Enter cash flows as positive numbers.

	Cash Flows
Year 0	-$186,120
Year 1
Year 2
Year 3
Year 4

Project B This project requires an initial investment of $210,600. The project will have a life of 4 years. Annual revenues associated with the project will be $80,000, and expenses associated with the project will be $15,000, for an annual net cash flow of $ .

	Cash Flows
Year 0	-$210,600
Year 1
Year 2
Year 3
Year 4

The cost of capital for the company is 8%.

If a project has a 5-year life, requires an initial investment of $150,000, and is expected to yield annual cash flows of $50,000, what is the net present value of the project if the required rate of return is set at 8%? If required, round your answer to the nearest cent.

Present Value Tables The Present Value of an Ordinary Annuity is the value of a stream of expected or promised future payments that have been discounted to a single equivalent value today. It is extremely useful for comparing two separate cash flows that differ in some way. Present Value of an Annuity of $1 at Compound Interest.

Net Present Value Computation =

(

$

x

)

$

What NPV does the previous calculation yield? $