A 25- Year Project Has a Cost of $1,500,000 and Has

question 378

Multiple Choice

A 25- year project has a cost of $1,500,000 and has annual cash flows of $400,000 in years 1-15, and $200,000 in years 16-25. The company's required rate is 14%. Given this information, calculate the payback of the project.

• A) 2.25 years
• B) 2.75 years
• C) 3.25 years
• D) 3.75 years
• E) 4.25 years

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Definitions:

National Debt

The cumulative sum of funds that a nation's government owes, often acquired by issuing bonds.

GDP

The GDP is the comprehensive market valuation of all end products and services made within a nation's borders during a certain period.

Federal Budget Deficits

The financial situation occurring when a government spends more money than it receives in income, typically measured over a fiscal year.

Federal Budget Deficit

The shortfall when the government's expenditures exceed its revenues in a fiscal year.