A project produces the following Cash Flows during the next 3 years:

Year |
1 |
2 |
3 |

Cash Flow |
456 |
567 |
678 |

If the cost of capital is 12%, what is the project’s Present Value (PV)?

(do not include $ sign or commas in your answer.

round your answer to the nearest $, eg., 500.)

A factory costs $ 400,000. It will produce an inflow (after operating costs) of $ 100,000 in year 1, $ 200,000 in year 2 and $ 300,000 in year 3.

The opportunity cost of capital is 12%.

Calculate the NPV.

(do not include $ or commas in your answer; round your answer to the nearest $)

An aunt of yours intends to bequeath you her savings.

She offers you three choices:

(a) receiving $ 100,000 today or

(b) receiving $ 200,000, after ten years or

(c) receiving $ 25,000 every year for the next 5 years.

If the interest rate is 6.75%, which option would you choose?

Indicate the amount you would receive under the best option in round $.

Do not include $ or comma in your answer.

Subject | Mathematics |

Due By (Pacific Time) | 02/14/2015 11:00 pm |

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