Peddler Products Inc. requires all capital investments to generate an internal rate of return of 14%. The company is currently considering an investment that is expected to generate annual cash inflows of $25,000 for 5 years.
Required: What amount should the cost of the investment not exceed? Show computations and ignore income taxes.

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The Answer of Peddler Products Inc. requires all capital investments to generate an internal rate of return of 14%. The company is currently considering an investment that is expected to generate annual cash inflows of $25,000 for 5 years.
Required: What amount should the cost of the investment not exceed? Show computations and ignore income taxes.