Acme,Incis Considering a Four-Year Project That Has Initial Outlay or Cost

question 44

Multiple Choice

Acme,Inc.is considering a four-year project that has initial outlay or cost of $100,000.The respective cash inflows for years 1,2,3 and 4 are: $50,000,$40,000,$30,000 and $20,000.Acme uses the discounted payback period method,and has a discount rate of 11.50%.Will Acme accept the project if it's payback period is 38 months?

• A)Yes,because it pays back in less than 38 months.
• B)No,because it pays back in over 38 months.
• C)Yes,because it pays back in under 37 months.
• D)No,because it pays back in over 37 months.

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Definitions:

Federal Taxes

refer to levies imposed by the government of a country on income, property, goods, services, and activities, used to fund public services and obligations.

Government Regulation

The establishment of rules and laws by governmental bodies intended to manage and control activities within various sectors of society for public welfare.

Profit Margins

The difference between the cost to produce a good or service and its selling price, expressed as a percentage of the selling price, indicating financial health.

American Manufacturers

refers to businesses and individuals involved in the production of goods within the United States, contributing to the country's industrial and economic growth.