The Cambro Foundation, a nonprofit organization, is planning to invest $174,843

Question

The Cambro Foundation, a nonprofit organization, is planning to invest $174,843 in a project that will last for three years. The project will produce net cash inflows as follows: Year 1 Year 2 Year 3 $74,000 $87,0ee Click here to view Exhibit 138-1 and Exhibit 138-2, to determine the appropriate discount factor(s) using table. Required Assuming that the project will yield exactly a 8% rate of return, what is the expected net cash inflow for Year 37(Round discount factor(s) to 3 decimal places.) Net cash inflow

Explanation / Answer

Net cash flow in year 3 is $40,000 Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up   Let cash flow in year 3 be x At 8% , Net cash flow would be 0 Statementshowing Computations Time PVF at 8% Amount PV                                                                                       -                      1.00      (174,843.00)                       (174,843.00)                                                                                  1.00                 0.926           74,000.00                           68,524.00                                                                                  2.00                 0.857           87,000.00                           74,559.00                                                                                  3.00                 0.794 x .794x Cash flow -31760 + 0.794x 0 = -31760 + .794x 31760 = .794x x =40000

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