Star City is considering an investment in the community center that is expected to return the following

Question:

Star City is considering an investment in the community center that is expected to return the following cash flows:
Year Net Cash Flow
1 . . . . . . . . . . . . $ 20,000
2 . . . . . . . . . . . . 50,000
3 . . . . . . . . . . . . 80,000
4 . . . . . . . . . . . . 80,000
5 . . . . . . . . . . . . 100,000
This schedule includes all cash inflows from the project, which will also require an immediate $180,000 cash outlay. The city is tax-exempt; therefore, taxes need not be considered.

Required
a. What is the of the project if the appropriate is 20 percent?
b. What is the of the project if the appropriate is 12 percent?

Net Present Value
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