A Project Has Estimated Annual Cash Flows of $95,000 for 4

question 110

Short Answer

A project has estimated annual cash flows of $95,000 for 4 years and is estimated to cost $260,000. Assume a minimum acceptable rate of return of 10%. Using the following tables determine the (a) net present value of the project and (b) the present value index, rounded to two decimal places.
Below is a table for the present value of $1 at compound interest.

Below is a table for the present value of an annuity of $1 at compound interest.

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Definitions:

Goal-setting Theory

A framework that suggests specific, challenging goals along with appropriate feedback contribute to higher and better task performance.

Comparable Worth

The concept that jobs of equal value to an organization should receive equal pay, regardless of the gender or minority status of the job holders.

Valence

The value an individual places on the expected outcome of an action or behavior, which can influence their motivation.

Instrumentality

In the context of motivation theory, the belief that a certain behavior will lead to achieving a desired outcome or reward.