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:

Nitrogen

Nitrogen is a chemical element with the symbol N and atomic number 7; it is a colorless, odorless gas that is a fundamental part of amino acids and nucleic acids, essential for life.

Carbon Dioxide

A gas without any color or smell, emanating from the burning of compounds containing carbon and the respiratory process, absorbed by vegetation in the process of converting light into energy.

Carbon Cycle

The series of processes by which carbon compounds are interconverted in the environment, chiefly involving the incorporation of carbon dioxide into living tissue by photosynthesis and its return to the atmosphere through respiration, the decay of dead organisms, and the burning of fossil fuels.

Fossil Fuels

Natural fuels such as coal, oil, and natural gas, derived from the remains of living organisms that were buried millions of years ago.