Use the following table,
Present Value of an Annuity of 1
| Periods | 8% | 9% | 10% | |||
| 1 | .926 | .917 | .909 | |||
| 2 | 1.783 | 1.759 | 1.736 | |||
| 3 | 2.577 | 2.531 | 2.487 |
A company has a minimum required rate of return of 9%. It is considering investing in a project which costs $840,000 and is expected to generate cash inflows of $336,000 at the end of each year for three years. The net present value of this project is
|
$850,416. |
|
$504,000. |
|
$85,032. |
|
$10,416. |