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Yale Inc. has two independent inyvestment opportunities, each requiring an initial investment of $260,000. The company's required rate of return is 10 percent. The
Yale Inc. has two independent inyvestment opportunities, each requiring an initial investment of $260,000. The company's required rate of return is 10 percent. The cash inflows for each investment are provided below. Investment A Investment B Year 1 $140,000 $20,000 Year 2 100,000 40,000 Year 3 60,000 60,000 Year 4 40,000 80,000 Year 5 20.000 160.000 Total inflows S360,000 S360,000 Factors: Present Value of S1 Factors: Present Value of an Annuity (r = 10%) (r- 10%) Year 0 1.0000 Year 1 0.9091 Year 1 0,9091 Factors: Present Value of $1 Factors: Present Value of an Annuity (r= 10%) (r= 10%) Year 0 1.0000 Year 1 0.9091 Year 1 0.9091 Year 2 0.8264 Year 2 1.7355 Year 3 0.7513 Year 3 2.4869 Year 4 0.6830 Year 4 3.1699 0.6209 Year 5 3.7908 Year 5 Refer to Exhibit 8-3. What is the net present value of Investment A (rounded to the nearest dollar)? O 34,730 O S100,000 O S1,104,688 O None of the answer choices is correct. O S294.730
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