You Need to Borrow $2,000 Quickly, and the Local Pawn

question 325

Multiple Choice

You need to borrow $2,000 quickly, and the local pawn shop will give it to you if you promise to repay them $200.92 monthly over the next year.
Suppose the pawn shop has more customers than funds. Which capital budgeting technique would
Allow it to rank potential customers in order to maximize current wealth?

• A) AAR
• B) Payback period
• C) Profitability index
• D) NPV
• E) Discounted payback

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Definitions:

Income Security

A measure of an individual's or family's financial safety, ensuring a stable source of income to meet basic needs.

Tax Revenue

Tax revenue is the income collected by government through various forms of taxes from individuals and businesses to fund public services and infrastructure.

Personal Income Taxes

Taxes levied on individuals or households based on their income level, contributing to government revenue and affecting disposable income.

Corporate Income Taxes

Taxes imposed by governments on the income earned by businesses and corporations.