15

1. ABC Inc. is considering a project with an initial cost of $1,269. The project will not produce any cash flows for the first three years. Starting in year four, the project will produce cash inflows of $787 a year for three years. This project is risky, so the firm has assigned it a discount rate of 5 percent. What is the project's net present value?

   Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 16

1. Suppose a project has initial outlay of $10,000 and after tax cash flows of $4,000 each year for 5 years. If the required rate of return is 10%, what is the equivalent annual annuity?

   Enter your answer rounded off to two decimal points.