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

question 14

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 9%. It is considering investing in a project which costs $420000 and is expected to generate cash inflows of $168000 at the end of each year for three years. The net present value of this project is

• A) $425208.
• B) $252000.
• C) $5208.
• D) $42516.

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Definitions:

Convergent Stress

A tectonic plate stress that occurs when two plates move toward each other, potentially causing mountains or volcanoes.

Tensional Stress

Stress that occurs when forces act in opposite directions to stretch an object or material, common in geology and materials science.

Alternating Pressure

A method often used in medical beds and surfaces to prevent bedsores, where the pressure is periodically distributed and then relieved.

Displaced

Moved or forced out of a usual or proper place, often used to describe people who are forced to leave their homes.