Given the Following Cash Flows for Project A: C₀ =

question 9

Multiple Choice

Given the following cash flows for project A: C₀ = -1,000,C₁ = +600,C₂ = +400,and C₃ = +1,500,calculate the payback period.

• A)one year
• B)two years
• C)three years
• D)cannot be determined

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Definitions:

Debt-to-Equity Ratio

A financial metric that shows the comparative ratio of equity to debt employed to fund a company's assets.

Return on Equity

A measure of a corporation's profitability, calculated as net income divided by shareholders' equity, indicating how effectively equity is being used.

Return on Assets

A measurement of profitability indicating how efficiently a company uses its assets to generate earnings.

Return on Debt

A measure of a company's profitability based on its total debt, indicating how effectively a company uses its borrowing.