Following is a table for the present value of $1 at compound interest:Year6%10%12%10.9430.9090.89320.8900.8260.79730.8400.7510.71240.7920.6830.63650.7470.6210.567Following is a table for the present value of an annuity of $1 at compound interest:Year6%10%12%10.9430.9090.89321.8331.7361.69032.6732.4872.40243.465 3.1703.03754.2123.7913.605Using the tables provided, if an investment is made now for $23,500 that will generate a cash inflow of $8,000 a year for the next 4 years, the net present value of the investment, assuming an earnings rate of 10%, isGroup of answer choices$23,500$16,050$1,860$25,360

Net Present Value=-Cash Outflow+Present Value of Cash…

Answered: Using the tables provided, if an…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Following is a table for the present value of $1 at compound interest:

Year	6%	10%	12%
1	0.943	0.909	0.893
2	0.890	0.826	0.797
3	0.840	0.751	0.712
4	0.792	0.683	0.636
5	0.747	0.621	0.567

Following is a table for the present value of an annuity of $1 at compound interest:

Year	6%	10%	12%
1	0.943	0.909	0.893
2	1.833	1.736	1.690
3	2.673	2.487	2.402
4	3.465	3.170	3.037
5	4.212	3.791	3.605

Using the tables provided, if an investment is made now for $23,500 that will generate a cash inflow of $8,000 a year for the next 4 years, the net present value of the investment, assuming an earnings rate of 10%, is

Group of answer choices

$23,500

$16,050

$1,860

$25,360

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