Masulis Inc

question 5

Multiple Choice

Masulis Inc. is considering a project that has the following cash flow and WACC data. What is the project's discounted payback?

• A) 1.61 years
• B) 1.79 years
• C) 1.99 years
• D) 2.22 years
• E) 2.44 years

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Definitions:

Invest

To allocate resources, usually money, with the expectation of generating an income or profit.

Scrap Value

The estimated resale value of an asset at the end of its useful life, often considered in depreciation calculations.

Coin Toss

A random method of deciding between two alternatives by flipping a coin and observing which side lands facing up.

Expected Value

A calculated average of all possible values of a random variable, weighted by their probabilities.