Johnson Corp A)$125,910

question 131

Multiple Choice

Johnson Corp.has an 8% required rate of return.It's considering a project that would provide annual cost savings of $50,000 for 5 years.The most that Johnson would be willing to spend on this project is $\begin{array}{lll}& \text { Present Value } & \text { PV of an Annuity } \\\text { Year } & \text { of } 1 \text { at } 8 \% & \text { of } 1 \text { at } 8 \%\\1 & .926 & .926 \\2 & .857 & 1.783 \\3 & .794 & 2.577 \\4 & .735 & 3.312 \\5 & .681 & 3.993\end{array}$

• A)$125,910.
• B)$165,600.
• C)$199,650.
• D)$34,050.

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