What is the maximum investment that can made today

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Reference no: EM133327464

Question: Mondanto Inc. has invested in a 6-year project that needs to earn an 8% annual rate of return. They have calculated that in order to break even from an NPV perspective they have to generate annual sales of $5 million over the 6 years. The project's annual after-tax cash flows are 10% of annual sales minus $300,000.

What is the maximum investment that can made today for this project to be acceptable? Ignore the impact of depreciation.

Reference no: EM133327464

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