Question

It will cost $165,000 to start Project 2 . The project will last for 5 years and has a discount fate of 10 . However, projects lke this have a payback cutoff of 3.5 years. What muat be the minimum equal yearl cashflows generated by the project for it to be accepted a.$42,857 b.$30,065 c.$47,143 d.$49,875 e.$33,000 ​

Answer 1

The minimum equal yearly cashflows for Project 2 to be accepted is approximately $47,143.

The answer is option ⇒c

Step-by-step explanation:

The minimum equal yearly cashflows generated by the project for it to be accepted can be calculated using the formula:

Cashflows = Initial Investment / ((1 + Discount Rate) ^ Project Duration)

Substituting the given values, we have:

Cashflows = $165,000 / ((1 + 0.10) ^ 5)

Calculating this expression, we get:

Cashflows ≈ $47,143

Therefore, the minimum equal yearly cashflows generated by the project should be approximately $47,143 for it to be accepted.

The answer is option ⇒c