ABC Company Is Adding a New Product Line That Will

question 22

Multiple Choice

ABC Company is adding a new product line that will require an investment of $1 500 000. The product line is estimated to generate cash inflows of $300 000 the first year, $250 000 the second year, and $200 000 each year thereafter for ten more years. What is the payback period?

• A)6.00 years
• B)2.73 years
• C)7.25 years
• D)6.75 years

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Definitions:

Evolutionary Theory

Evolutionary theory explains the diversity of life on Earth through processes like natural selection, where organisms better adapted to their environment tend to survive and reproduce.

Achievement Motivation

An individual's desire for significant accomplishment, mastering of skills, control, or high standards.

High Affiliation Needs

Refers to an individual's strong desire to belong to groups, form close relationships, and be an effective member of a group or society.

Fear Of Failure

The apprehension or anxiety experienced when one anticipates not achieving success, which can affect motivation and performance.