What Is the Payback Period for a $16,700 Investment with the Following

question 35

Multiple Choice

What is the payback period for a $16,700 investment with the following cash flows? $$\begin{array} { | c | r | } \hline \text { Year } & \text { Cash Flow } \\\hline 1 & \$ 2,100 \\\hline 2 & 6,800 \\\hline 3 & 6,900 \\\hline 4 & 7,300 \\\hline 5 & 5,100 \\\hline\end{array}$$

• A)3.12 years
• B)3.89 years
• C)2.12 years
• D)3.44 years
• E)3.67 years

---

Definitions:

Price Elasticity

Measures the responsiveness of quantity demanded or supplied to a change in price.

Wealth

The abundance of valuable resources or valuable material possessions, including the total of all financial assets minus any liabilities.

Price Elasticity

A measure in economics that shows how the quantity demanded of a good or service responds to a change in its price.

Bushels

A unit of volume that is used primarily in the United States to measure agricultural produce, such as grains, fruits, and nuts.