Consider an Investment with an Initial Cost of $20,000 and Is

question 22

Multiple Choice

Consider an investment with an initial cost of $20,000 and is expected to last for 5 years. The expected cash flow in years 1 and 2 are $5000, in years 3 and 4 are $5,500 and in year 5 is $1,000. The total cash inflow is expected to be $22,000 or an average of $4,400 per year. Compute the payback period in years.

• A) 3.18
• B) 3.82
• C) 4.55
• D) 4.00

---

Definitions:

High Values

Refers to principles or standards considered to be of utmost importance by an individual or society.

Low Values

Refers to minimal or significantly below average quantities or assessments in various contexts, such as moral standards, numerical data, or personal principles.

Correlational Study

A descriptive study that looks for a consistent relationship between two phenomena.

Consistent Relationship

A stable and reliable connection between individuals or variables, where patterns of interaction or correlation are predictable over time.