You Are Considering an Investment Which Has the Following Cash

question 185

Multiple Choice

You are considering an investment which has the following cash flows. If you require a four year payback period, should you take the investment?

• A) Yes, the payback is 1.000 years.
• B) Yes, the payback is 2.675 years.
• C) Yes, the payback is 3.375 years.
• D) No, the payback is 4.125 years.
• E) No, the payback is 5.500 years.

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Definitions:

Insurance Premiums

Payments made periodically to an insurance company in exchange for coverage and protection against financial loss.

Deductible

An amount that a policyholder must pay out of pocket before an insurance company will cover any expenses.

Doctor Bills

Charges or fees for medical services rendered by a physician.

Insurance Premiums

Payments made to an insurance company to buy coverage, providing financial protection against various risks.