An Investment That Costs $120,000 Is Estimated to Reduce Cash

question 49

Multiple Choice

An investment that costs $120,000 is estimated to reduce cash operating costs by $40,000 per year for 4 years.The required rate of return is 10 percent.Determine the payback period assuming an inflation rate of 8 percent on the operating costs saved.

• A)About 2.79 years
• B)About 2.92 years
• C)About 2.66 years
• D)About 3 years

---

Definitions:

Filtrate

The liquid that has passed through a filter, often referring to the fluid that passes through the kidney's nephrons during the process of urine formation.

Hormonally Controlled

Describes processes or activities in the body that are regulated by hormones, substances secreted by glands for regulating bodily functions.

Sodium Ions

Positively charged ions of sodium (Na+), essential for various physiological functions including the regulation of blood pressure and volume.

Tubular Reabsorption

Movement of materials, by means of diffusion, active transport, or symport, from the filtrate within a nephron to the blood.