Tampa Corporation is considering an investment proposal that will require an initial outlay of $804,000 and would yield yearly cash inflows of $200,000 for nine years
The company uses a discount rate of 10%. What is the NPV of the investment?
Present value of an ordinary annuity of $1:
8% 9% 10%
1 0.926 0.917 0.909
2 1.783 1.759 1.736
3 2.577 2.531 2.487
4 3.312 3.24 3.17
5 3.993 3.89 3.791
6 4.623 4.486 4.355
7 5.206 5.033 4.868
8 5.747 5.535 5.335
9 6.247 5.995 5.759
A) $350,000
B) $402,000
C) $347,800
D) $251,667
C .C)
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