Ginny Is Considering an Investment Which Will Cost Her $120,000

question 35

Multiple Choice

Ginny is considering an investment which will cost her $120,000. The investment produces no cash flows for the first year. In the second year the cash inflow is $35,000. This inflow will increase to $55,000 and then $75,000 for the following two years before ceasing permanently. Ginny requires a 10% rate of return and has a required discounted payback period of three years. Ginny should _______ this project because the discounted payback period is ______.

• A) accept; 2.03 years
• B) accept; 2.97 years
• C) accept; 3.97 years
• D) reject; 3.03 years
• E) reject; 3.97 years

---

Definitions:

Cerebrospinal

Relating to or involving both the brain and the spinal cord.

Thorn

A sharp, pointed projection, usually found on the stems of certain plants, used as a defense mechanism.

Star-shaped

Having a shape reminiscent of a star, characterized by radiating points around a central body.

Bradykinesia

denotes a condition characterized by slowness in the initiation and execution of movement, often associated with Parkinson's disease.