A Company Is Considering an Investment That Will Return $20,000

question 46

Multiple Choice

A company is considering an investment that will return $20,000 at the end of each semiannual period for four years.If the company requires an annual return of 10%,what is the maximum amount it is willing to pay for this investment?

• A)Not more than $63,398
• B)Not more than $126,796
• C)Not more than $80,000
• D)Not more than $129,264
• E)Not more than $160,000

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Definitions:

Administrative Expenses

Costs related to the general operation of a business, including expenses such as office supplies, salaries of non-sales personnel, and rent.

Employee Claims

Rights or demands made by workers against their employer for various benefits, compensation, or acknowledgments of rights or wrongs.

Unpaid Taxes

Taxes that are owed to the government but have not been paid by the due date.

Customer Deposits

Funds paid in advance by customers for goods or services that have yet to be delivered or performed.