Over the next four years, the City of Mythica, New York, is expecting the following...
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Accounting
Over the next four years, the City of Mythica, New York, is expecting the following cash flows from a federal grant: year 1$150,000; year 2$220,000; year 3$250,000; year 4$175,000. The city wants to use the grant as collateral for a loan, but it is unsure about its net present value. Use Exhibit 26-3 for your solution.
a. What is the net present value of the grant if the rate of return is expected to be 5 percent? b. What is the net present value of the grant if the rate of return is expected to be 8 percent?
(For all requirements, Round your "PV factor" to 3 decimal places.)
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