Sloan IncRecently Invested in a Project with a 3-Year Life Span

question 138

Multiple Choice

Sloan Inc.recently invested in a project with a 3-year life span.The net present value was $9,000 and annual cash inflows were $21,000 for year 1; $24,000 for year 2; and $27,000 for year 3.The initial investment for the project, assuming a 15% required rate of return, was $\begin{array}{rrr}& \text { Present Value } & \text { PV of an Annuity } \\\text { Year } & \text { of } 1 \text { at } 15 \% & \text { of } 1 \text { at } 15 \%\\\hline 1 & .870 & .870 \\2 & .756 & 1.626 \\3 & .658 & 2.283\end{array}$

• A)$45,792.
• B)$45,180.
• C)$29,232.
• D)$38,376.

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