You Need to Borrow $2,000 Quickly, and the Local Pawn

question 377

Multiple Choice

You need to borrow $2,000 quickly, and the local pawn shop will give it to you if you promise to repay them $200.92 monthly over the next year.

Suppose the pawn shop has more customers than funds. Which capital budgeting technique would allow it to rank potential customers in order to maximize current wealth?

• A) AAR
• B) Payback period
• C) Profitability index
• D) NPV
• E) Discounted payback

---

Definitions:

Cycle Time

The total time from the beginning to the end of a process, indicating the speed at which a product moves through a production system.