Beduin Services Is Considering an Investment of $25,000 $\begin{array}{cr}\text { Year } & \text { Cash Flow } \\\hline 1 & \$ 10,000 \\2 & 11,000 \\3 & 8,000 \\4 & 15,000 \\5 & 15,000\end{array}$

question 114

Multiple Choice

Beduin Services is considering an investment of $25,000. Data related to the investment are as follows: $\begin{array}{cr}\text { Year } & \text { Cash Flow } \\\hline 1 & \$ 10,000 \\2 & 11,000 \\3 & 8,000 \\4 & 15,000 \\5 & 15,000\end{array}$ Cost of capital is 14 percent. What is the payback period in years approximated to two decimal points, assuming no taxes are paid?

• A)2.12
• B)4.00
• C)3.00
• D)2.50

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Definitions:

Production Budget

An estimate of the total cost of production, including direct material, labor, and overhead expenses, for a specific period.

Management's Plans

The strategic and operational plans developed by a company's management to achieve its goals and objectives.

Direct Labor Hours

The sum of working hours of employees directly participating in the production of goods or provision of services.

Production Budget

An estimate of the total number of units that must be produced in a given period to meet both sales and inventory needs.