Denning Co. has additional funds that need to be invested, and is considering purchasing an asset that is expected to return $75,000 per year after tax for the next 15 years, with no disposal value. Denning Co.'s required rate of return is 11%.
What is the maximum amount that Denning Co. would be willing to pay to purchase this asset? (Use the appropriate discount factor from Appendix A.)

Question

Denning Co. has additional funds that need to be invested, and is considering purchasing an asset that is expected to return $75,000 per year after tax for the next 15 years, with no disposal value. Denning Co.'s required rate of return is 11%. 
What is the maximum amount that Denning Co. would be willing to pay to purchase this asset? (Use the appropriate discount factor from Appendix A.)

Quizplus · Accepted Answer

The Answer of Denning Co. has additional funds that need to be invested, and is considering purchasing an asset that is expected to return $75,000 per year after tax for the next 15 years, with no disposal value. Denning Co.'s required rate of return is 11%. 
What is the maximum amount that Denning Co. would be willing to pay to purchase this asset? (Use the appropriate discount factor from Appendix A.)