?-) C ? ezto.mheducation.com/nm.tpx The Cambro Foundation, a nonprofit organizat

Question

?-) C ? ezto.mheducation.com/nm.tpx The Cambro Foundation, a nonprofit organization, is planning to invest $136,356 in a project that will last for three years. The project will produce net cash inflows as follows Year 1 Year 2 Year 3 $ 45,000 S 65,000 Click here to view Exhibit 8B-1 and Exhibit 8B-2. to determine the appropriate discount factor s) using table. Required: Assuming that the project will yield exactly a 7% rate of return, what is the expected net cash inflow for Year 3? (Round discount factor(s) to 3 decimal places.) Net Cash Inflow ReferenceseBook & Resources Worksheet Dily Easy en O Type here to search

Explanation / Answer

(a) (b) (c ) (d) = (b)* (c ) Year Cash Flow PV Factor PV 0    (1,36,356) (1/(1.07))^0 1.000 (1,36,356.00) 1        45,000 (1/(1.07))^1 0.935      42,075.00 2        65,000 (1/(1.07))^2 0.873      56,745.00 Required PV of Year 3 [-136356+42075+56745]      37,536.00 Divided by PV Factor (Year 3) [(1/(1.07)^3)]            0.816 Expected Cash Flow for Year 3 [37536/0.816]      46,000.00 Net cash Inflow 46000

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