Question

Samurai Corporation has just evaluated a project. The following information is avallable obout this project IRR is 13% and the annual cash flow are $15,000 for 4 years. How much does the project cost? Multiple Choice

a)$49,082.11
b)$52,208.18
c)$41,909.29
d)$44.617.07

Answer 1

The cost of the project is determined by the formula for calculating present value, using the annual cash flow and the internal rate of return (IRR). Plugging in the values, the project cost is $41,909.29.

Step-by-step explanation:

To determine the cost of the project, we can use the formula for calculating present value. We have the annual cash flow of $15,000 for 4 years and an internal rate of return (IRR) of 13%. We can use this information to calculate the initial cost of the project.

Using the formula for present value, we can calculate the cost of the project:

Cost of the project = Cash flow / (1 + IRR)^t

Plugging in the values, we get:

Cost of the project = $15,000 / (1 + 0.13)^4 = $41,909.29

Therefore, the correct answer is option (c) $41,909.29.