An Investor Is Considering a Project That Will Generate $800,000

question 18

Multiple Choice

An investor is considering a project that will generate $800,000 per year for four years.In addition to upfront costs,at the completion of the project at the end of the fifth year there will be shut-down costs of $500,000.If the cost of capital is 5%,based on the MIRR,at what upfront costs does this project cease to be worthwhile?

• A)$2.32 million
• B)$2.44 million
• C)$2.58 million
• D)$2.84 million

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