A Firm Is Considering a Project with an Annual Cash

question 63

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 percent. Ignoring income taxes, 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