When Cash Flows Are Equal Each Year,the Payback Period Is

question 85

Multiple Choice

When cash flows are equal each year,the payback period is calculated as:

• A)Initial investment × Annual net cash flow.
• B)Initial investment/Annual net cash flow.
• C)Annual net cash flow/Initial investment.
• D)Annual net cash flow − Initial investment/Project life.

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Definitions:

Holding Constant

A method in statistical analysis where certain variables are kept fixed to isolate the effect of one or more variables under investigation.

Unit Increase

Refers to an increment or rise by one unit in the value of a specific variable or quantity.

Regression Equation

A mathematical formula that describes the relationship between dependent and independent variables, often used for prediction.

Second-order Polynomial

A polynomial equation of degree two, which can be expressed in the form ax^2 + bx + c, where a, b, and c are constants.