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bezimeni [28]
1 year ago
9

A project with an initial investment of $460,100 will generate equal annual cash flows over its 11-year life. The project has a

required return of 8.2 percent. What is the minimum annual cash flow required to accept the project
Business
1 answer:
seropon [69]1 year ago
4 0

Answer: $65,075.85

Explanation:

Given that the cash flow should be constant, it will be an annuity.

The initial investment will be the present value of this annuity.

Present value of annuity = Annuity * ( 1 - (1 + rate)^-number of periods) / rate

460,100 = Annuity * ( 1 - (1 + 8.2%) ⁻¹¹) / 8.2%

460,100 = Annuity * 7.070211525

Annuity = 460,100 / 7.070211525

= $65,075.85

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Answer:

The total selling expenses for the quarter will be $25,800

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2 years ago
SkyChefs, Inc., prepares in-flight meals for a number of major airlines. One of the company’s products is grilled salmon in dill
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