An Initial Investment of $270,000 Is Expected to Generate $140,000

question 77

Multiple Choice

An initial investment of $270,000 is expected to generate $140,000 in annual cost savings over the asset's expected 3-year life.Assume straight-line depreciation and ignore income taxes.The payback period is _____.

• A)0.75 years
• B)3.00 years
• C)1.93 years
• D)2.40 years

---

Definitions:

Command System

An economic system where the government makes all decisions on production and consumption.

Central Planning

An economic system where the government or a centralized authority makes all decisions regarding the production and distribution of goods and services.

Competition

The rivalry among businesses to attract consumers and gain market share, driving innovation and efficiency.

Independently Acting

The behavior of an entity that makes decisions based on its own interest and circumstances rather than being influenced by others.