Stern Associates Is Considering a Project That Has the Following

question 70

Multiple Choice

Stern Associates is considering a project that has the following cash flow data.What is the project's payback? $$\begin{array} { l c c c c c c } \text { Year } & 0 & 1 & 2 & 3 & 4 & 5 \\\hline \text { Cash flows } & - \$ 975 & \$ 300 & \$ 310 & \$ 320 & \$ 330 & \$ 340\end{array}$$

• A) 2.54 years
• B) 2.42 years
• C) 3.83 years
• D) 3.14 years
• E) 3.61 years

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Definitions:

Accidental

An unexpected and unintentional event that causes damage or injury.

Indorser

An alternative spelling of "endorser," referring to a person who signs a document (often a negotiable instrument) to endorse it, thereby assuming responsibility under certain conditions.

Subsequent Holder

An individual or entity that lawfully receives possession or control of a negotiable instrument, such as a check or promissory note, after it has been issued.

Honor

A principle that drives individual conduct to embody integrity, respect, and ethical behavior.