Smythe Company -Refer to Smythe Company

Smythe Company $$\begin{array}{l}\text { Smythe Company is considering the following investment: }\\\begin{array} { l l } \text { Investment } & \$ 140,000 \\\text { Annual revenues } & \$ 96,000 \\\text { Annual variable costs } & \$ 32,000 \\\text { Annual fixed out-of-pocket costs } & \$ 20,000 \\\text { Discount rate } & 12 \% \\\text { Expected life of project } & 8 \text { years }\end{array}\end{array}$$
-Refer to Smythe Company. What is the present value of the future cash flows?

A) $136,822
B) $152,538
C) $204,884
D) $218,592

Correct Answer:

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