What is project xyz net present value

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Question 1: Rent-to-Own Equipment Co. is considering a new inventory system that will cost $450,000. The system is expected to generate positive cash flows over the next four years in the mounts of $250,000 in one year, $125,000 in year two, $110,000 in year three, and $80,000 in year four. Rent-to-Own's required rate of return is 10%. What is the net present value of this project?

a) $115,000

b) $45,328

c) $34,773

d) $17,750

Question 2: Project XYZ requires an initial outlay of $200,000 and has profitability index of 1.8. The project is expected to generate equal annual cash flows over the next ten years. The required return for this project is 10%. What is project XYZ's net present value?

a) $360,000

b) $288,000

c) $160,000

d) $40,000

Reference no: EM132503508

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