A Project Has an Initial Cost of $8,600 and Produces

question 96

Multiple Choice

A project has an initial cost of $8,600 and produces cash inflows of $3,200,$4,900,and $1,500 over the next three years,respectively. What is the discounted payback period if the required rate of return is 8%?

• A) 2.05 years
• B) 2.13 years
• C) 2.33 years
• D) 3.00 years
• E) never

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Definitions:

Oil Refineries

Facilities where crude oil is processed and refined into more useful petroleum products, such as gasoline, diesel fuel, and heating oil.

Growing Demand

An increase in the quantity of a product or service that consumers are willing and able to buy over a given period.

Economizing Problem

The fundamental economic issue of meeting people's unlimited wants with limited resources, necessitating choices and priorities in resource allocation.

Economic Wants

The desires of individuals or societies for goods and services that provide utility and satisfaction, exceeding the basic needs for survival.