What Is the Payback Period for the Following Investment

question 279

Multiple Choice

What is the payback period for the following investment?

• A) 4 years
• B) 3 years
• C) 2 years
• D) 1 year
• E) The investment doesn't pay back

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Definitions:

Marginal Tax Rates

Marginal tax rates are the rates of tax applied to the next dollar of income, used to determine the tax impact of additional income or deductions.

Total Tax

The sum of all taxes levied on an individual or a corporation by various governmental agencies.

Provincial Tax Brackets

These refer to the range of income segments taxed at different rates by provincial governments in countries like Canada, where taxation powers are shared between federal and provincial authorities.

Net Working Capital

The difference between a company’s current assets and its current liabilities, indicating the liquidity of the business.