Given the Following Project Information and Assuming Straight-Line Depreciation to Zero

question 198

Multiple Choice

Given the following project information and assuming straight-line depreciation to zero, what is the discounted payback period? Initial investment = $500,000; life = five years; cost savings = $160,000 per year; salvage value = $30,000 in year 5; tax rate = 34%; discount rate = 13%.

• A) Two years
• B) Three years
• C) Four years
• D) Five years
• E) The discounted payback period is greater than the project's life.

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Definitions:

Sensory Adaptation

The process by which sensory receptors become less responsive to constant stimuli, allowing individuals to ignore background levels of stimulation.

Absolute Threshold

The smallest level of stimulus that can be detected by a sense, such as the faintest sound that can be identified.

Transduction

The process of converting one form of energy into another, such as converting light waves into neural signals by the sensory organs.

Absolute Threshold

The smallest intensity of a stimulus that can be detected by an organism's sensory systems 50% of the time.