Figure 14-6. Present Value of $1

question 40

Multiple Choice

Figure 14-6. Present value of $1
Present value of an Annuity of $1
Refer to Figure 14-6.Morgan Clinical Practice is considering an investment in new imaging equipment that will cost $400,000.The equipment is expected to yield cash inflows of $80,000 per year for a six year period.Morgan set a required rate of return at 10 percent.What is the net present value of the investment? (Note: there may be a rounding error depending on the table you use to compute your answer.Choose the answer closest to the one you calculate.)

• A)$51,600
• B)($51,600)
• C)$348,400
• D)($348,600)
• E)$451,600

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