Johnson Corp.has an 8% required rate of return.It's considering a project that would provide annual cost savings of $50000 for 5 years.The most that Johnson would be willing to spend on this project is $\begin{array} { c c c }
\underline{\text { Year } }& \begin{array} { c }
\text { Present Value } \
\underline{\text { of } 1 \text { at } 8 \%}
\end{array} & \begin{array} { c }
\text { PV of an Annuity } \
\underline{\text { of } 1 \text { at } 8 \%}
\end{array} \
1& .926 & .926 \
2 & .857 & 1.783 \
3 & .794 & 2.577 \
4 & .735 & 3.312 \
5 & .681 & 3.993
\end{array}$

Question

Johnson Corp.has an 8% required rate of return.It's considering a project that would provide annual cost savings of $50000 for 5 years.The most that Johnson would be willing to spend on this project is $\begin{array} { c c c } 
\underline{\text { Year } }& \begin{array} { c } 
\text { Present Value } \
\underline{\text { of } 1 \text { at } 8 \%}
\end{array} & \begin{array} { c } 
\text { PV of an Annuity } \
\underline{\text { of } 1 \text { at } 8 \%}
\end{array} \
1& .926 & .926 \
2 & .857 & 1.783 \
3 & .794 & 2.577 \
4 & .735 & 3.312 \
5 & .681 & 3.993
\end{array}$

Quizplus · Accepted Answer

The Answer of Johnson Corp.has an 8% required rate of return.It's considering a project that would provide annual cost savings of $50000 for 5 years.The most that Johnson would be willing to spend on this project is $\begin{array} { c c c } 
\underline{\text { Year } }& \begin{array} { c } 
\text { Present Value } \
\underline{\text { of } 1 \text { at } 8 \%}
\end{array} & \begin{array} { c } 
\text { PV of an Annuity } \
\underline{\text { of } 1 \text { at } 8 \%}
\end{array} \
1& .926 & .926 \
2 & .857 & 1.783 \
3 & .794 & 2.577 \
4 & .735 & 3.312 \
5 & .681 & 3.993
\end{array}$

Johnson Corp A)$125910 B)$165600

Johnson Corp A)$125910
B)$165600