A Firm Is Considering a Project with an Annual Cash

Multiple Choice

A firm is considering a project with an annual cash flow of £200,000. The project would have a 7-year life, and the company uses a discount rate of 10 per cent. Ignoring income taxes, what is the maximum amount the company could invest in the project and have the project still be acceptable?

A) £718,200
B) £1,400,000
C) £973,600
D) £200,000