Flores Company Has Identified That the Cost of New Manufacturing

question 5

Multiple Choice

Flores Company has identified that the cost of new manufacturing equipment will be $60000 but with the use of the new equipment net income will increase by $5000 a year. If depreciation expense is $5000 a year the cash payback period is:

• A) 16.7 years.
• B) 11.4 years.
• C) 12 years.
• D) 6 years.

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Definitions:

Market Share

The portion of a market controlled by a particular company or product, usually expressed as a percentage.

Brand Identity

The visible elements of a brand, such as color, design, and logo, that identify and distinguish the brand in consumers' minds.

Brand Extension

The practice of using an existing brand name on a new product in a different category to leverage brand equity.

Brand Equity

The value and strength of a brand that determines its worth, based on consumer recognition, preferences, and loyalty.