A Firm Is Evaluating a Capital Budgeting Project That Generates

question 3

Multiple Choice

A firm is evaluating a capital budgeting project that generates cash inflows equal to $50 per year for the next five years. If the project's traditional payback period (PB) is 3.6 years, what is its initial cost?

• A)$200
• B)$120
• C)$180
• D)$140
• E)$150