A firm is considering a project that will yield $10,000 per year for 10 years. The required return on this project is 12.05%, compounded monthly. What is the maximum amount that the firm should be willing to invest in the project to accept this project

$695,603.10

Explanation:

The maximum amount that the firm would be willing to invest in the project to accept it can be calculated using the present value (PV) of an ordinary annuity stated as follows:

PV = P × [{1 - [1 ÷ (1+r)]^n} ÷ r] …………………………………. (1)

Where;

PV = Present value or the maximum amount to invest?

P = yearly yield = $10,000

r = required return rate = 12.05% annually = (12.05% ÷ 12) monthly = 1.0041667% monthly or 0.010041667

n = number of period = 10 years = 10 × 12 months = 120 months

Substituting the values into equation (1), we have:

PV = 10,000 × [{1 - [1 ÷ (1+0.010041667)]^120} ÷ 0.010041667]

     = 10,000 × [{1 - [1 ÷ 1.010041667]^120} ÷ 0.010041667]

     = 10,000 × [{1 - [0.990058165590509]^120} ÷ 0.010041667]

      = 10,000 × [{1 - 0.301498531063694} ÷ 0.010041667]

      = 10,000 × [0.698501468936306 ÷ 0.010041667]

      = 10,000 × 69.5603099501613

PV = $695,603.10

The maximum amount that the firm would be willing to invest in the project to accept it is $695,603.10 .

metallurgy is your answer

the "study of metals and the process of refining ("

note that it says metal. metallurgy has the word "metal" in it, and so is most likely your answer (and is your answer).

~

a.