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 × [tex](1 + i)^{n}[/tex]
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 × [tex](1 + 0.12)^{10}[/tex]
FV = $630,000 × 3.105848
FV = $1,956,684
$1,956,684 can be reinvested after the liquidation of 10 years.
