Wright Corp Is Considering the Purchase of a New Piece

question 98

Multiple Choice

Wright Corp is considering the purchase of a new piece of equipment,which would have an initial cost of $1,000,000 and a 5 year life.There is no salvage value for the equipment.The increase in cash flow each year of the equipment's life would be as follows: What is the payback period?

• A)2.39 years
• B)2.96 years
• C)3.00 years
• D)3.51 years

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Definitions:

Stepwise Regression

Stepwise regression is a statistical method of building predictive models by sequentially adding or removing variables based solely on their statistical significance.

Multiple Regression

A procedure within statistics for modeling how various independent variables impact a single dependent variable.

Independent Variables

Variables in an experiment or model that are manipulated or selected by the researcher to determine their effect on the dependent variable.

Iterative Procedure

An iterative procedure is a process that repeats steps to achieve a desired goal or solution, often used in mathematical algorithms and problem-solving.