The Following Four-Year Project Has an Initial Cost of $1,000,000

question 211

Multiple Choice

The following four-year project has an initial cost of $1,000,000. The future cash inflows for the next four years are $600,000, $500,000, $400,000, and $400,000, respectively. If the rate of return is
12%, determine the discounted payback period for this project.

• A) 2.74 years
• B) 2.44 years
• C) 2.14 years
• D) 1.94 years
• E) 1.74 years

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Definitions:

Time Between Arrivals

The average or specified period of time that elapses between the arrival of successive units, customers, or entities in a process or system.

Repetitive Focus Factory

A factory designed to produce high volumes of a limited range of products, focusing on efficiency and repetitive processes.

Processing Part

The phase or component in manufacturing that involves the change or transformation of materials into final products.

Number Of Channels

Refers to the pathways or routes through which goods and services are distributed from the producer to the consumer.