Use the Following Information to Answer the Question(s)below

question 42

Multiple Choice

Use the following information to answer the question(s) below.
Rearden Metals is considering opening a strip-mining operation to provide some of the raw materials needed in producing Rearden metal.The initial purchase of the land and the associated costs of opening up mining operations will cost $100 million today.The mine is expected to generate $16 million worth of ore per year for the next 12 years.At the end of the 12th year Rearden will need to spend $20 million to restore the land to its original pristine nature appearance.
-The payback period for Rearden's mining operation is closest to:

• A)5.00 years.
• B)6.00 years.
• C)6.25 years.
• D)6.50 years.

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Definitions:

Cash Dividend

A payout to shareholders from a company's earnings in the form of cash.

Dividends in Arrears

This term refers to dividends on preferred shares that have been declared but not yet paid to shareholders.

Stockholder Group

A Stockholder Group consists of individuals or entities that own shares of stock in a company, giving them certain rights, such as voting on corporate matters.

Cash Dividend

A distribution of a portion of a company's earnings, decided by the board of directors, paid to a class of its shareholders in cash.