A Company Is Considering a 5-Year Project with an Initial

question 15

Multiple Choice

A company is considering a 5-year project with an initial investment of $90,000.Cash inflows will be $30,000 for the first two years and $25,000 for the next 3 years.If the company's required rate of return is 12%, determine its discounted payback.

• A)4.40years
• B)3.60 years
• C)3.80 years
• D)4.00 years

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Definitions:

Individualist Cultures

Societies that emphasize personal achievements and rights, prioritizing individual goals over group objectives.

Collectivist Cultures

Societies that prioritize the needs and goals of the group over the individual, emphasizing interdependence, family ties, and social harmony.

Cost/Benefit Ratio

A comparison of the costs involved in an action to the benefits derived from that action, used in decision-making and evaluation of projects or investments.

Barnum Effect

The tendency for people to accept vague and general personality descriptions as highly accurate for themselves.