Johnson Corp A)$125,910

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 $\begin{array}{rrr}& \text { Present Value } & \text { PV of an Annuity } \\\text { Year } & \text { of } 1 \text { at } 8 \% & \text { of } 1 \text { at } 8 \%\\\hline1 & .926 & .926 \\2 & .857 & 1.783 \\3 & .794 & 2.577 \\4 & .735 & 3.312 \\5 & .681 & 3.993\end{array}$

A) $125,910.
B) $165,600.
C) $199,650.
D) $34,050.

Correct Answer:

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