Jarvey Company Is Studying a Project That Would Have a Ten-Year

question 106

Multiple Choice

Jarvey Company is studying a project that would have a ten-year life and would require a $450,000 investment in equipment that has no salvage value.The project would provide net income each year as follows for the life of the project: The company's required rate of return is 12%.What is the payback period for this project?

• A) 2 years
• B) 3 years
• C) 4.28 years
• D) 9 years

---

Definitions:

Gizzard

Of birds and some other animals, a digestive chamber lined with a hard material that grinds up food.

Acidic Chyme

The partially digested, acidic food mixture that moves from the stomach to the small intestine.

Heartburn

A discomforting burning sensation in the chest, usually occurring after eating, caused by stomach acid refluxing back into the esophagus.

Sphincter

Ring of muscle in a tubular organ or at a body opening.