How to solve this problem?

vitalstrike82vitalstrike82 Posts: 4Registered Users ■□□□□□□□□□
Hi all,

does any one knows how to solve this problem as shown below? Thanks

Project XYZ promise to be worth $587,000 in three years. Assuming that the rate of return is currently six percent, what is the minimum amount of funds that Project XYZ may cost and still be initiated if the organisation wants to earn at least $75,000 on the project?

A) $492,863
B) This answer depends on the cost of project resources
C) $417,863
D) $512,000

Comments

  • NOLAJNOLAJ Posts: 490Member
    At first glance, there doesn't seem to be enough information given. I would have to go with B.).
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  • vitalstrike82vitalstrike82 Posts: 4Registered Users ■□□□□□□□□□
    Hi all,

    The answer given by the test is C
    i found the working to this question.

    Future value: 587,000
    I/Y: 6%
    N= 3
    Therefore the va;ue of 587,000 in three years is worth 492,857
    The cost they must incurred shall be 492,860-75,000 = 417,863

    My question is will the comptia exam present such a question? This is related somehow to a finance question. Manage to pull out my finance textbook to solve this question
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