Cannon Company is considering a capital project that will return $100,000 each year for five years. At the company’s hurdle rate of 10%, the present value of the annuity is $379,100. If the return on investment in the first year is $37,910, what is the return of investment that year?
(a) $137,910
(b) $100,000
(c) $62,090
(d) None of the above
Cannon Company is considering a capital project that will return $100,000 each year for five years.
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