Use the Table for the Question(s)below

question 81

Multiple Choice

Use the table for the question(s) below.
Consider the following two projects with cash flows in $:
-The payback period for project B is closest to:

• A)2.5 years.
• B)2.0 years.
• C)2.2 years.
• D)2.4 years.

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Definitions:

Plan Assets

Assets that are specifically earmarked to pay pension benefits, typically held in a pension fund.

Pension Expense

An accounting charge representing the cost to a company of providing retirement benefits to employees during a particular time period.

Projected Benefit Obligation

An actuarial measure of the present value of pension benefits owed to employees, accounting for projected salary increases.

Service Cost

The actuarial present value of benefits attributed to employee service during a period, often recognized in pension expense accounting.