How much did the project cost

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Jolly Company invested in an eight-year project. It is expected that the annual cash flow from the project, net of income taxes, will be P20,000. Information on present value factors is as follows:

Present value of P1 at 12% for eight periods 0.404

Present value of an ordinary annuity of P1 at 12% for eight periods 4.968

Problem 1: Assuming that Jolly based its investment decision on an internal rate of return of 12%, how much did the project cost?

A. P 99,360
B. P 80,800
C. P160,000
D. P 64,640

 

Reference no: EM133006915

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