A Company Is Considering a Project with Annual After-Tax Cash $\quad2.195$

question 40

Multiple Choice

A company is considering a project with annual after-tax cash flows of $5,700.00 per year for six years. The company's cost of capital is 14 percent. Present and future value factors for a 14 percent interest rate for six years are as follows: Future value of $\quad2.195$
Present value of $\quad0.456$
Future value of a series of equal payments $\quad8.536$
Present value of a series of equal payments $\quad3.889$ Using the net present value method, what is the maximum amount that the company should invest?

• A) $22,167.30
• B) $48,655.20
• C) $12,511.50
• D) $2,599.20

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