A Project Costs $475 and Has Cash flOws of $100

question 379

Multiple Choice

A project costs $475 and has cash flows of $100 for the first three years and $75 in each of the project's last five years. If the discount rate is 10%, what is the discounted payback period?

• A) The project never pays back on a discounted basis
• B) 5 years
• C) 6 years
• D) 7 years
• E) 8 years

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Definitions:

Extracting

The act of removing or obtaining a resource from a source, often used in the context of mining, harvesting, or obtaining information from data.

Barrel

A unit of measurement for oil and petroleum products, equivalent to 42 U.S. gallons.

Conservation

The management of resources to prevent waste, destruction, or neglect, ensuring their sustainability for future generations.

Resource Extraction

The process of retrieving natural resources from the Earth, such as minerals, fuels, and timber, for human use.