If a Proposed Expenditure of $70,000 for a Fixed Asset

question 165

True/False

If a proposed expenditure of $70,000 for a fixed asset with a 4-year life has an annual expected net cash flow and net income of $32,000 and $12,000, respectively, the cash payback period is 2.5 years.

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Definitions:

Federal Budget

The government's estimate of revenue and expenditure for a specific fiscal year, detailing how public funds will be allocated.

Contractionary Influence

Economic policies or conditions intended to reduce the size of the economy by decreasing the money supply or government expenditures, typically to combat inflation.

Expansionary Influence

Activities or policies designed to stimulate economic growth or expansion, often through increased spending or tax cuts.

Discretionary Influence

The ability to make decisions or take actions based on personal judgment rather than fixed rules.