A Project Manager Is Using the Payback Method to Make

question 32

Multiple Choice

A project manager is using the payback method to make the final decision on which project to undertake. The company has a 10% required rate of return and expects a 4% rate of inflation for the following five years. What is the non-discounted payback of a project that has cash flows as shown in the table?

• A) 3.7 years
• B) 4.1 years
• C) 5.0 years
• D) 4.8 years

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Definitions:

Two-Tailed Test

A statistical hypothesis test in which the critical area of a distribution is two-sided and tests whether a sample is either greater than or less than a certain range of values.

Null Hypothesis

A statement suggesting that no statistical significance exists in a set of observations.

Alternative Hypothesis

A statement that contradicts the null hypothesis and indicates that there is an effect or a difference.

Sets Of Variables

Groups of variables or elements that are related and can be manipulated, measured, or controlled in research.