2D2B ALLSTAR COMPANY INVESTS IN A PROJECT WITH EXPECTED CASH INFLOWS...

313.

CSO: 2D2a

LOS: 2D2b

Allstar Company invests in a project with expected cash inflows of $9,000 per year

for four years. All cash flows occur at year-end. The required return on investment

is 9%. If the project generates a net present value (NPV) of $3,000, what is the

amount of the initial investment in the project?

a.

$11,253.

b.

$13,236.

c.

$26,160.

d.

$29,160.