Following is a table for the present value of $1 at compound interest: Year 6% 1...

 

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Following is a table for the present value of $1 at compound interest: Year 6% 1 0.943 2 0.890 3 0.840 0.792 0.747 4 5 Year 6% 1 0.943 2 1.833 3 2.673 4 3.465 5 4.212 10% 0.909 0.826 0.751 0.683 0.621 a. $24,885 b. $1,335 c. $7,850 Od. $23,550 12% Following is a table for the present value of an annuity of $1 at compound interest: 10% 0.909 1.736 2.487 3.170 3.791 0.893 0.797 0.712 0.636 0.567 12% 0.893 1.690 2.402 3.037 3.605 Using the tables provided, if an investment is made now for $23,550 that will generate a cash inflow of $7,850 a year for the next 4 years, the net present value (rounded to the nearest dollar) of the investment, assuming an earnings rate of 10%, is Following is a table for the present value of $1 at compound interest: Year 6% 1 0.943 2 0.890 3 0.840 0.792 0.747 4 5 Year 6% 1 0.943 2 1.833 3 2.673 4 3.465 5 4.212 10% 0.909 0.826 0.751 0.683 0.621 a. $24,885 b. $1,335 c. $7,850 Od. $23,550 12% Following is a table for the present value of an annuity of $1 at compound interest: 10% 0.909 1.736 2.487 3.170 3.791 0.893 0.797 0.712 0.636 0.567 12% 0.893 1.690 2.402 3.037 3.605 Using the tables provided, if an investment is made now for $23,550 that will generate a cash inflow of $7,850 a year for the next 4 years, the net present value (rounded to the nearest dollar) of the investment, assuming an earnings rate of 10%, is

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SOLUTION To calculate the net present value NPV of the investment we need to find the present value ... View the full answer