A company is considering investing in a project that is expected to return $350,000 four years from now.How much is the company willing to pay for this investment if the company requires a 12% return?
A)$ 55,606
B)$137,681
C)$222,425
D)$265,764
E)$350,000

Question

Quizplus · Accepted Answer

Present Value = Future Value * Interest Factor
Present Value = $350,000 * 0.6355 = $222,425
0.6355 is the interest factor on the Present Value table; n =4; i = 12%

A Company Is Considering Investing in a Project That Is