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:

Salaries And Wages Payable

Liabilities representing amounts owed by an employer to its employees for work performed but not yet paid.

FICA Taxes Withheld

The part of wages that are taken out for Social Security and Medicare, as required by the Federal Insurance Contributions Act.

FICA Taxes

Taxes collected from both employers and employees in the United States to fund Social Security and Medicare, consisting of both Social Security and Medicare taxes.

Supplemental Retirement

Additional retirement savings and income plans beyond standard pension arrangements, often offered to employees as part of their benefits package.