Answer: $74,135.94
Explanation:
Using present value factor = [tex]\dfrac{1}{(1+r)^n}[/tex] , where r= percent of return, n number of years
As per given , r= 808% = 0.088
Present value factor for 9 year life = [tex]\dfrac{1}{1.088^1}+\dfrac{1}{1.088^2}+...\dfrac{1}{1.088^9}[/tex]
[tex]0.919117647059+0.844777249135+0.776449677514+0.713648600656+0.655927022662+0.602874101711+0.554112225837+0.509294325218+0.468101401855\\\\=6.04430225165[/tex]
Minimum cash flow= [tex]\dfrac{\text{Initial investment}}{\text{Present value factor for 9 year life}}[/tex]
[tex]=\dfrac{448100}{6.04430225165}\approx74135.94[/tex]
Hence, the minimum annual cash flow required to accept the project = $74,135.94 .
