Stellan Manufacturing is considering the following two investment proposals:

Proposal X

Proposal Y
Investment

$730,000

$504,000
Useful life

5 years

4 years
Estimated annual net cash inflows received at the end of each year

$156,000

$100,000
Residual value

$50,000

$0
Depreciation method

Straightminus
line

Straightminus
line
Annual discount rate

10%

9%
Compute the present value of the future cash inflows from Proposal Y.
Present value of an ordinary annuity of $1:

8%

9%

10%
1

0.926

0.917

0.909
2

1.783

1.759

1.736
3

2.577

2.531

2.487
4

3.312

3.240

3.170
5

3.993

3.809

3.791
6

4.623

4.486

4.355
A.
$252,000
B.
$292,320
C.
$268,884
D.
$324,000

Answer:When the federal government spends more money than it receives in taxes in a ... spending over time in nominal dollars is misleading because it does not take ... defense spending as a share of GDP has generally declined since the 1960s, ... Healthcare expenditures include both payments for senior citizens (Medicare), ...

Explanation:

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