A project is expected to produce cash inﬂows of $6,500 for three years. What is the maximum amount that can be spent on costs to initiate this project and still consider the project as
Acceptable, given an 11% discount rate?
A) $15,884.15
B) $15,897.97
C) $15,900.00
D) $15,967.39
E) $19,500.00

Question

Quizplus · Accepted Answer

The correct answer is A because the maximum amount that can be spent on costs to initiate this project and still consider the project as acceptable is $15,884.15. This is calculated using the present value of the cash inflows, which is $15,884.15.

A Project Is Expected to Produce Cash Inﬂows of $6,500