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

question 348

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. What is the payback period of the project?

• A) The project never pays back.
• B) 4.75 years
• C) 5.00 years
• D) 5.33 years
• E) 6.00 years

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Definitions:

Ending Inventory

The worth of products ready for purchase at the conclusion of a financial period, determined by adding the initial inventory to acquisitions and subtracting the cost of goods sold.

Production Planning

The process of outlining the steps necessary for the efficient production of goods, including scheduling, materials procurement, and capacity planning.

Raw Materials Production Needs

The quantity and type of raw materials required to meet production targets and schedules.

Budgeted Unit Sales

The number of units that a company plans or expects to sell over a specific period according to its budget.