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46. A planned factory expansion project has an estimated initial cost of $500,000. Using a...

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Accounting

46. A planned factory expansion project has an estimated initial cost of $500,000. Using a discount rate of 20 percent, the present value of the future cost savings from the expansion is $520,000. To yield exactly the 20 percent time-adjusted rate of return, the actual investment expenditure should not exceed the $500,000 estimate by more than a. $160,000. b. $20,000. c. $1,075. d. $43,000.

ANS: B $20,000

Please explain and show all work.

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