Use the following table to help answer this question:

Present Value of an Annuity of 1

Periods 9% 10% 11% 12%

5 3.890 3.791 3.696 3.605

6 4.486 4.355 4.231 4.111

Ferry Company is evaluating two capital investment proposals. Figures have been provided to estimate each project below:

Project Fish Project Cheese

Initial investment $400,000 $600,000

Annual net income 25,000 45,000

Net annual cash inflow 100,000 142,000

Estimated useful life 5 years 6 years

Salvage value -0- -0-

Ferry company requires a 10% rate of return on all new investments.

The Net Present Value for Project Cheese is

Select one:

a. $618,410

b. $182,912

c. $100,000

d. $18,410

e. None of the above