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Question(s) / Instruction(s):

A given project requires a $28,000 investment and is expected to generate end-of-period annual cash inflows as follows:

YEAR 1 

YEAR 2

YEAR 3

 

$12000

$13000 

$12000

 

                               

 Assuming a discount rate of 10%, what is the net present value of this investment? Selected present value factors for a single sum are shown in the table below.

         I =10% 

           I =10% 

            I =10% 

        n-1               

                n-2          

             n-3

          .9091

             .8264

           .7513

a)            ($4,966.68)

b)            $2,668.00

c)            $30,668.00

d)            ($7,461.00)

e)            $0.00

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