A Company Is Considering the Purchase of a New Piece

question 59

Multiple Choice

A company is considering the purchase of a new piece of equipment for $90,000. Predicted annual cash inflows from this investment are $36,000 (year 1) , $30,000 (year 2) , $18,000 (year 3) , $12,000 (year 4) and $6,000 (year 5) . The payback period is:

• A) 4.50 years.
• B) 4.25 years.
• C) 3.50 years.
• D) 3.00 years.
• E) 2.50 years.

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Definitions:

Psychotherapy

Psychotherapy is a form of treatment for mental health issues that involves talking with a therapist to understand and resolve problematic behaviors, beliefs, feelings, and responses.

Behavior Therapy

A form of psychotherapy that focuses on changing undesirable behaviors through conditioning techniques.

Effectiveness

The degree to which something is successful in producing a desired result or outcome.

Psychotherapy

A treatment approach involving psychological methods, typically involving conversations with a therapist, to help someone overcome emotional or behavioral problems.