A Firm Is Considering a Project with Annual Cash Flows

question 16

Multiple Choice

A firm is considering a project with annual cash flows of £120,000. The project would have an 8-year life, and the company uses a discount rate of 12 per cent. What is the maximum amount the company could invest in the project and the project still be acceptable?

• A)£488,740
• B)£562,614
• C)£580,291
• D)£596,160

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Definitions:

Globalization

The process by which businesses or other organizations develop international influence or start operating on an international scale, leading to increased interconnectedness and interdependence of the world's economies, cultures, and populations.

Health Problems

Any deviation from or interruption of the normal structure or function of any part, organ, or system of the body that is manifested by a characteristic set of symptoms and signs.

Toxic Chemical

A substance that is harmful or lethal to living organisms when introduced into the environment, through inhalation, ingestion, or skin absorption.

Revitalization Movements

Social movements for radical cultural reform in response to widespread social disruption and collective feelings of great stress and despair.