Acme,IncIs Considering a Four-Year Project That Has an Initial Outlay

question 98

Essay

Acme,Inc.is considering a four-year project that has an initial outlay or cost of $80,000.The respective future cash inflows for years 1,2,3 and 4 are: $40,000,$40,000,$30,000 and $30,000.Acme uses the discounted payback period method and has a discount rate of 12%.Will Acme accept the project if it's payback period is two and one-half years?

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Definitions:

Parsimonious

Favoring simplicity and minimalism, especially in explanations that involve the least number of assumptions.

Outcome Expectations

These are beliefs about the expected results of one's behavior, which can influence motivation and action in both social cognitive theory and behavioral psychology.

Social Learning

The process of acquiring behaviors, attitudes, and skills through observing and imitating others within a social context.

Operant Model

A theory of learning that emphasizes the role of rewards and punishments in shaping behavior.