Odeletta Corporation Is Considering an Investment of $518,000 in a Land

question 45

Multiple Choice

Odeletta Corporation is considering an investment of $518,000 in a land development project.The investment will yield cash inflows of $220,000 per year for five years.The company uses a discount rate of 9%.What is the net present value of the investment? Present value of an ordinary annuity of $1:
$$\begin{array} { | l | r | r | r | } \hline & { 8 \% } & { 9 \% } & { 10 \% } \\\hline 1 & 0.926 & 0.917 & 0.909 \\\hline 2 & 1.783 & 1.759 & 1.736 \\\hline 3 & 2.577 & 2.531 & 2.487 \\\hline 4 & 3.312 & 3.24 & 3.17 \\\hline 5 & 3.993 & 3.89 & 3.791 \\\hline\end{array}$$

• A) $238,280
• B) $337,800
• C) $341,880
• D) $220,000

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