Sommer, Inc., is considering a project that will result in initial aftertax cash savings of $2.3 million at the end of the first year, and these savings will grow at a rate of 2 percent per year indefinitely. The firm has a target debt-equity ratio of .60, a cost of equity of 10 percent, and an aftertax cost of debt of 4.6 percent. The cost-saving proposal is somewhat riskier than the usual project the firm undertakes; management uses the subjective approach and applies an adjustment factor of 3 percent to the cost of capital for such risky projects. What is the maximum inital cost the company would be willing to pay for the project

A. economic resources to be used or turned into cash within one year. b. reports assets, liabilities, and stockholders' equity. c. decrease assets; increase liabilities and stockholders' equity. d. increase assets; decrease liabilities and stockholders' equity. e. an exchange or event that has a direct and measurable financial effect. f. accounts for a business separate from its owners. g. the principle that assets should be recorded at their original cost to the company. h. a standardized format used to accumulate data about each item reported on financial statements. i. the basic accounting equation. j. the two equalities in accounting that aid in providing accuracy. k. the account credited when money is borrowed from a bank using a promissory note. l. cumulative earnings of a company that have not yet been distributed to the owners. m. every transaction has at least two effects. n. amounts presently owed by the business. transaction, separate entity assumption, balance sheet, liabilities, assets, current assets, notes payable, duality of effects, retained earnings, debit.