43. (Uncertain project life) Jakes Exercise Products Inc. is evaluating a potential investment project that would have

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43. (Uncertain project life) Jake’s Exercise Products Inc. is evaluating a potential investment project that would have an initial cost of $400,000 and will return

$150,000 annually for six years. The company’s cost of capital is 9 percent. Assume that the company is fairly certain regarding the initial cost and the annual return of $150,000, but uncertain as to how many years the $150,000 cash flows will be realized. How many years must the project generate cash flows of $150,000 to be minimally acceptable (ignore tax)?

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Cost Accounting Traditions And Innovations

ISBN: 9780324180909

5th Edition

Authors: Jesse T. Barfield, Cecily A. Raiborn, Michael R. Kinney

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