What is the maximum amount a firm should pay for a project that will return $15,000 annually for 5 years if the opportunity cost is 18%?

The firm should pay $46907.57 for the given project.

Explanation:

Given information:

Return = $15000 annually

Time = 5 years

Opportunity cost = 18%

The formula for payment is

where, R is return, OC is opportunity cost, t is time in years.

Substitute R=15000, t=5 and OC=0.18 in the above formula.

Therefore the firm should pay $46907.57 for the given project.

answer; no individual buyer or seller has any significant impact on the market price;