What Is the Payback Period for a $28,500 Investment with the Following

question 78

Multiple Choice

What is the payback period for a $28,500 investment with the following cash flows?

• A)3.65 years
• B)3.89 years
• C)4.22 years
• D)4.44 years
• E)The project never pays back.

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Definitions:

Normal Profit

The minimum profit necessary for a company to remain competitive in the market, essentially covering its opportunity costs.

Competitive Firm

A company that operates in a market where there are many buyers and sellers, and no single entity can control the market price of goods or services.

Lowest Price

The minimum price at which a product or service is offered in the market, typically influenced by competition and cost structures.

Competitive Firm

A company that operates in a market where it has to compete with other firms for customers, setting prices based on market demand and supply.