ABC Company Is Adding a New Product Line That Will

question 91

Multiple Choice

ABC Company is adding a new product line that will require an investment of $1,500,000. The product line is estimated to generate cash inflows of $300,000 the first year, $250,000 the second year, and $200,000 each year thereafter for ten more years. What is the payback period?

• A) 2.73 years
• B) 6.00 years
• C) 6.75 years
• D) 7.25 years

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Definitions:

Hirsutism

A condition characterized by excessive hair growth on the body or face, particularly in women, often due to hormonal imbalance.

Extremities

The outermost parts of the human body, including the hands, feet, arms, and legs.

Abnormal Condition

A state in which health differs from a prescribed norm, often indicating the presence of disease or disorder.

Pancreas

An organ in the digestive system that produces enzymes and hormones, including insulin, to aid in digestion and regulate blood sugar.