Gamma Company Is Considering an Investment of $504,000 in a Land

Multiple Choice

Gamma Company is considering an investment of $504,000 in a land development project.It will yield cash flows of $216,000 for 5 years.The company uses a discount rate of 9%.What is the net present value of the investment?
Present value of annuity of $1:
$$\begin{array} { | l | r | r | r | } \hline & { 8 \% } & { 9 \% } & { 10 \% } \\\hline 1 & 0.926 & 0.917 & 0.909 \\\hline 2 & 1.783 & 1.759 & 1.736 \\\hline 3 & 2.577 & 2.531 & 2.487 \\\hline 4 & 3.312 & 3.24 & 3.17 \\\hline 5 & 3.993 & 3.89 & 3.791 \\\hline\end{array}$$

A) $216,000
B) $231,840
C) $332,640
D) $336,240