Jericho Inc. has additional funds available for investment, and is considering purchasing an asset that is expected to provide an after-tax cash inflow of $35,000 per year for the next 7 years, with an after-tax disposal value of $10,000. Jericho Inc.'s required rate of return is 11%.
What is the maximum amount that Jericho Inc. would be willing to pay to purchase this asset? (Use a financial spreadsheet to answer this question.)

Question

Jericho Inc. has additional funds available for investment, and is considering purchasing an asset that is expected to provide an after-tax cash inflow of $35,000 per year for the next 7 years, with an after-tax disposal value of $10,000. Jericho Inc.'s required rate of return is 11%. 
What is the maximum amount that Jericho Inc. would be willing to pay to purchase this asset? (Use a financial spreadsheet to answer this question.)

Quizplus · Accepted Answer

The Answer of Jericho Inc. has additional funds available for investment, and is considering purchasing an asset that is expected to provide an after-tax cash inflow of $35,000 per year for the next 7 years, with an after-tax disposal value of $10,000. Jericho Inc.'s required rate of return is 11%. 
What is the maximum amount that Jericho Inc. would be willing to pay to purchase this asset? (Use a financial spreadsheet to answer this question.)