2 B D E F 1 Please complete Quick Study as follows: Remember when doing homework, use my in-class assignment as a guide and utilize the PVA table. 3 This will be different than the one in the appendix, but will save you time. 4 5 1) If Kimball Company invests $100,000 today, it can expect to receive $20,000 at the end of each year for 6 the next seven years plus an extra $12,000 at the end of the seventh year. What is the net present 7 value of this investment assuming a required 8% return on investments? 8 9 10 2) Tinto Company is planning to invest in a project at a cost of $135,000. This project has the following 11 expected cash flows over its three year life: Year 1, $45,000; Year 2, $52,000; and Year 3, $78,000. 12 Management requires a 10% rate of return on its investments. Compute the net present value of this 13 investment. 14 15 163) Camino Company is considering an investment expected to generate an average net income after 17 taxes of $3,825 for three years. The investment costs $90,000 and has an estimated $12,000 salvage 18 value. Compute the average rate of return for this investment; assume the company uses straight-line 19 depreciation. Hint: Use the following formula when computing the average annual investment 20 21 Annual average investment Beginning book value + Ending book value 22 (straight-line case only! 2 1-12 DQ QS EX PR In-class PVA Table FVA Table PV Table FV Table Ready