Given the Following Cash Flows for Project A: C0 =

question 32

Multiple Choice

Given the following cash flows for project A: C0 = -1000, C1 = +600 ,C2 = +400, and C3 =
+1500, calculate the payback period.

• A) One year
• B) Two years
• C) Three years
• D) None of the above

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Definitions:

GDP Deflator

An economic measure of inflation that adjusts the gross domestic product (GDP) for changes in price levels, reflecting the real economic output.

Consumer Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services, used as an indicator of inflation.

Inflation Rate

The percentage rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.

Typical Family

A standard or average family unit, often used in statistical analyses to represent an average household.