Question $2$

A company is considering a $2-$year project with the

following cash flows:

Initial investment: $$1300$

Cash inflow, year $1$: $$670$

Cash inflow, year $2$: $$840$

Salvage value, year $2$: $$220$

The company uses straight$-$line depreciation to

depreciate the initial investment cost. In other words,

annual depreciation is $($initial investment $-$ salvage

value$)/2.$ The company's discount rate is $9\%.$

What is the Net Present Value of this project?

$($Use the present values tables above for any present

value calculations. Don't round intermediate

calculations. Round your final answer to the nearest

dollar.$)$ For reference, abbreviated versions of the present value tables from Chapter $12$ are below. Use these

tables for any present value calculations in the following questions.

Present Value of an ordinary annuity of $$1$ received at the end of the period for $n$ periods.