Brady Corp $\begin{array}{lr}\text { Year } &\text { Net Annual Cash Flow }\\1 & \$ 3,000 \\2 & 8,000 \\3 & 15,000 \\4 & 9,000\end{array}$

question 55

Multiple Choice

Brady Corp. is considering the purchase of a piece of equipment that costs $20,000. Projected net annual cash flows over the project's life are: $\begin{array}{lr}\text { Year } &\text { Net Annual Cash Flow }\\1 & \$ 3,000 \\2 & 8,000 \\3 & 15,000 \\4 & 9,000\end{array}$ The cash payback period is

• A) 2.29 years.
• B) 2.60 years.
• C) 2.40 years.
• D) 2.31 years.

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Definitions:

Probabilities

A measure of the likelihood that an event will occur, expressed on a scale from 0 (impossible) to 1 (certain).

Invest

Distributing financial resources with the aim of achieving financial gain or income.

Probability

A measure of the likelihood that an event will occur, often expressed as a number between 0 and 1.

Expected Value

A calculation in probability theory that summarizes the expected return or outcome from a random event or situation.