Johnson Corp has an 8 required rate of return Its considerin

Johnson Corp. has an 8% required rate of return. It\'s considering a project that would provide annual cost savings of $50,000 for 5 years. The most that Johnson would be willing to spend on this project is Year Present Value of 1 at 8% PV of an Annuity of 1 at 8%.

$125,910.

$165,600.

$34,050.

$199,650.

Solution

50000*PVIFA8,5years =50000*3.993 =199650