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:

Bluefin Tuna

A species of tuna known for its size, speed, and value, especially in sashimi and sushi dishes.

Common Resource

A resource that is available to all users, but which can be depleted if overused, such as fisheries, clean air, and public parks.

E-books

Digital versions of books, readable on electronic devices such as computers, tablets, and e-readers.

National Defense

Government-provided security against foreign aggression, encompassing the military forces and other defense measures.