Use the Following Table for Questions 109-111 $\text { Present Value of an Annuity of } 1$

question 139

Multiple Choice

Use the following table for questions 109-111. $\text { Present Value of an Annuity of } 1$
$\begin{array}{rrrr}\text { Periods } & 8 \% & 9 \% & 10\%\\1 & .926 & .917 & .909 \\2 & 1.783 & 1.759 & 1.736 \\3 & 2.577 & 2.531 & 2.487\end{array}$
-A company has a minimum required rate of return of 9%. It is considering investing in a project that costs $210,000 and is expected to generate cash inflows of $84,000 at the end of each year for three years. The net present value of this project is

• A) $212,604.
• B) $42,000.
• C) $21,261.
• D) $2,604.

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Definitions:

Responsibility Centre

A business segment or department for which a manager has authority and responsibility for certain activities, performance, and outcomes.

Allocation Base

A criterion or standard used to distribute overhead costs among various cost objects, such as products or projects.

Reciprocal Services

Transactions in which services are exchanged between departments or units within an organization, often involving an allocation of costs.

Mutual Provision

The practice of supplying and receiving goods or services among a group or organizations, based on cooperative agreement rather than market competition.