CII, Inc., invests $630,000 in a project expected to earn a 12% annual rate of return. The earnings will be reinvested in the pr
1 answer:
Answer:
$1,956,684
Explanation:
As the project has a expected annual return, we have to calculate future value of this investment to find how much money Cll, Inc. will have after 10 years to reinvest.
We know,
FV = PV ×
Given,
Present Value, PV = $630,000
Annual rate of return, i = 12% = 0.12
Number of period, n = 10 years
Putting the value into the above formula, we can get,
FV = $630,000 ×
FV = $630,000 × 3.105848
FV = $1,956,684
$1,956,684 can be reinvested after the liquidation of 10 years.
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