A Company Is Considering a Project with an Annual Cash

question 7

Multiple Choice

A company is considering a project with an annual cash flow of $400,000. The project would have a seven-year life, and the company uses a discount rate of 10%. What is the maximum amount the company could invest in the project and have the project still be acceptable?

• A) $200,000
• B) $718,200
• C) $1,400,000
• D) $1,947,200

---

Definitions:

Linking Up

The act of connecting or bringing together resources, individuals, or systems to facilitate collaboration, communication, or function.

Cascading Approach

A strategic method where decisions or policies are passed down through the levels of an organization, allowing for alignment and consistency across units.

Organizational Goals

Represents the strategic objectives or targets that an organization aims to achieve, which guide its operations and are used to measure its performance.

Performance Appraisal System

A formal process through which employee performance is assessed, typically on a regular basis, against defined objectives and criteria.