An Investment Project Provides Cash Flows of $1,562 Per Year

question 27

Multiple Choice

An investment project provides cash flows of $1,562 per year for 10 years. If the initial cost is $8,720, what is the payback period?

• A) 7.36 years
• B) 5.28 years
• C) 5.58 years
• D) 8.13 years
• E) Never

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Definitions:

Fixed Factory Overhead Volume Variance

The difference between the budgeted and actual fixed overhead costs, attributable to variations in the volume of production.

Supervisors

Individuals in an organization responsible for overseeing the work of employees and managing their performance.

Volume Variance

The difference between the budgeted fixed overhead at 100% of normal capacity and the standard fixed overhead for the actual units produced.

Factory Overhead Cost

All of the costs of producing a product except for direct materials and direct labor.