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 that requires an investment of $210000 and is expected to generate cash inflows of $90000 at the end of each year for three years. The present value of future cash inflows for this project is
A) $210000.
B) $223830.
C) $227790.
D) $17790.

Question

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 that requires an investment of $210000 and is expected to generate cash inflows of $90000 at the end of each year for three years. The present value of future cash inflows for this project is
A) $210000.
B) $223830.
C) $227790.
D) $17790.

Quizplus · Accepted Answer

The present value of future cash inflows is calculated by multiplying the annual cash inflow by the present value factor for 3 years at 9%, which is $90,000 * 2.531 = $227,790.

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

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