The Seattle Corporation Has Been Presented with an Investment Opportunity

question 71

Multiple Choice

The Seattle Corporation has been presented with an investment opportunity which will yield cash flows of $30,000 per year in Years 1 through 4,$35,000 per year in Years 5 through 9,and $40,000 in Year 10.This investment will cost the firm $150,000 today,and the firm's required rate of return is 10 percent.Assume cash flows occur evenly during the year,1/365th each day.What is the payback period for this investment?

• A) 5.23 years
• B) 4.86 years
• C) 4.00 years
• D) 6.12 years
• E) 4.35 years

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Definitions:

Havana

The capital city, major port, and leading commercial center of Cuba, known for its historical buildings, vibrant culture, and significant role in the Caribbean region.

Rising Power

Refers to a nation or entity that is becoming increasingly influential and strong in economic, political, or military terms on the global stage.

Open Door Policy

Demand in 1899 by Secretary of State John Hay, in hopes of protecting the Chinese market for U.S. exports, that Chinese trade be open to all nations.

Investment Opportunities

Prospects or options to invest capital with the potential to generate a return.