Question: What is approximately the maximum amount that a firm should consider paying for a project that will return $12,000 annually for 6 years if the

  1. What is approximately the maximum amount that a firm should consider paying for a project that will return $12,000 annually for 6 years if the opportunity cost is 12%?
  2. If we know a project's IRR is 11%, and provides annual cash-flows of $15,000 for six years, how much is the maximum that the project could have cost assuming the investors are rational decision makers and what to maximize income?

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