Use the Following Table $\text { Present Value of an Annuity of } 1$

question 189

Multiple Choice

Use the following table $\text { Present Value of an Annuity of } 1$$\begin{array}{rrrr}\text { Period } & 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 8% and is considering investing in a project that costs $175000 and is expected to generate cash inflows of $70000 at the end of each year for three years. The net present value of this project is

• A) $5390.
• B) $35000.
• C) $2170.
• D) $180390.

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Definitions:

Clinicians

Healthcare professionals who work directly with patients, diagnosing and treating diseases, injuries, and other physical and mental impairments.

Insurance Companies

Corporations that provide coverage, or reimbursement, to policyholders in the event of certain losses, sickness, or damage, in exchange for premium payments.

Birth Control Pills

A form of oral contraception that uses hormonal compounds to prevent ovulation, alter the uterine lining, and inhibit sperm movement to prevent pregnancy.

United States

A country in North America consisting of 50 states, a federal district, five major self-governing territories, and various possessions.