Write the Word or Phrase That Best Completes Each Statement $\$ 3.00$

question 394

Multiple Choice

Write the word or phrase that best completes each statement or answers the question.
-Assume the cost of a gallon of milk is $\$ 3.00$ . With continuous compounding, find the time it would take the cost to be 5 times as much (to the nearest tenth of a year) , at an annual inflation rate of $6 \%$ .

• A) \(0.0 \mathrm { yr }\)
• B) \(9.9 \mathrm { yr }\)
• C) \(0.1 \mathrm { yr }\)
• D) \(26.8 \mathrm { yr }\)

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Definitions:

Payback Period

The time it takes for an investment to generate income or revenue equal to its cost, used to assess the feasibility or risk of an investment.

Cash Flows

The net amount of cash being transferred into and out of a business.

Internal Rate

The interest rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equals zero, used in capital budgeting to measure and compare the profitability of investments.

Nth-Order Equations

Equations that involve derivatives of an unknown function to the nth degree, often found in mathematics and physics.