What Is the Approximate Maximum Amount That a Firm Should

question 85

Multiple Choice

What is the approximate maximum amount that a firm should consider paying for a project that will return $15,000 annually for 5 years if the opportunity cost is 10 percent?

• A)$33,520
• B)$56,860
• C)$62,540
• D)$75,000 PV = $15,000

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Definitions:

Limited Liability Company (LLC)

A business form consisting of one or more persons or entities filing an operating agreement with a state to conduct business with limited liability to the owners, yet treated as a partnership for tax purposes.

Separate Legal

Refers to a legal entity, such as a corporation, that is legally distinct from its owners.

Taxable Entity

An individual, organization, or corporation subject to taxes on income or transactions by governmental agencies.

Proprietorship

A form of business organization where a single individual owns the company and is responsible for its debts.