The Cost of a New Machine Is $250,000

question 56

Multiple Choice

The cost of a new machine is $250,000. The machine has a 3-year life and no salvage value. If the cash flow each year is equal to 40% of the cost of the machine, calculate the payback period for the project:

• A) 2 years
• B) 2.5 years
• C) 3 years
• D) Cannot be determined because of insufficient data

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Definitions:

Criterion Deficiency

A situation where the criteria used to evaluate performance do not fully capture all the aspects of the job performance.

Criterion Contamination

The issue in performance evaluation where irrelevant factors influence the appraisal, potentially leading to inaccurate results.

Inter-Rater Reliability

The degree of agreement among different individuals assessing or scoring the same event, demonstrating consistency in measurements.

Multinational Corporation

A corporation that has its facilities and other assets in at least one country other than its home country, and operates on a global scale.