A Firm Is Evaluating a Proposal Which Has an Initial

question 21

Multiple Choice

A firm is evaluating a proposal which has an initial investment of $35,000 and has cash flows of $10,000 in year 1, $20,000 in year 2, and $10,000 in year 3. The payback period of the project is ________.

• A) 1 year
• B) 2 years
• C) between 1 and 2 years
• D) between 2 and 3 years