Fernando Designs Is Considering a Project That Has the Following

question 15

Multiple Choice

Fernando Designs is considering a project that has the following cash flow and WACC data.What is the project's discounted payback?

• A)1.88 years
• B)2.09 years
• C)2.29 years
• D)2.52 years
• E)2.78 years

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Definitions:

Short Run

A period in which at least one input (such as plant size) is fixed, and only the variable inputs can be adjusted.

Price System

An economic mechanism that uses prices arising from supply and demand interactions to communicate information to help guide the allocation of resources.

Scarce Goods

Goods that are limited in supply in comparison to their demand, necessitating allocation mechanisms.

Automatically Distributes

Refers to processes or systems that allocate resources, duties, or information without the need for human intervention.