A Firm Is Considering a Project with an Annual Cash

question 71

Multiple Choice

A firm is considering a project with an annual cash flow of $80,000. The project would have a 10-year life, and the company uses a discount rate of 8%. What is the maximum amount the company could invest in the project and have the project still be acceptable (rounded) ?

• A) $800,000
• B) $536,800
• C) $406,420
• D) $727,208

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