Figure 14-6. Present value of $1
Present value of an Annuity of $1
Refer to Figure 14-6.Roman Knoze is considering two investments.Each will cost $20,000 initially.Project 1 will return annual cash flows of $10,000 in each of three years.Project 2 will return $5,000 in year 1,$10,000 in year 2,and $15,000 in year 3.Roman requires a minimum rate of return of 10 percent.What is the net present value of Project 2?

Question

Figure 14-6. Present value of $1
 Present value of an Annuity of $1
 Refer to Figure 14-6.Roman Knoze is considering two investments.Each will cost $20,000 initially.Project 1 will return annual cash flows of $10,000 in each of three years.Project 2 will return $5,000 in year 1,$10,000 in year 2,and $15,000 in year 3.Roman requires a minimum rate of return of 10 percent.What is the net present value of Project 2?

Quizplus · Accepted Answer

The Answer of Figure 14-6. Present value of $1
 Present value of an Annuity of $1
 Refer to Figure 14-6.Roman Knoze is considering two investments.Each will cost $20,000 initially.Project 1 will return annual cash flows of $10,000 in each of three years.Project 2 will return $5,000 in year 1,$10,000 in year 2,and $15,000 in year 3.Roman requires a minimum rate of return of 10 percent.What is the net present value of Project 2?

Figure 14-6. Present Value of $1