Logan, Inc -
How Long Is the Payback Period for Investment B

question 32

Multiple Choice

Logan, Inc. is evaluating two possible investments in depreciable plant assets. The company uses the straight-line method of depreciation. The following information is available:
$\begin{array}{|l|r|r|}\hline& \text { Investment A } & \text { Investment B } \\ \hline \text { Initial capital investment } & \$ 60,000 & \$ 90,000 \\\hline \text { Estimated useful life } & 3 \text { year } & 3 \text { years } \\\hline \text { Estimated residual value } & -0- & -0-\\\hline \text { Estimated annual net cash inflow for 3 years } & \$ 25,000 & \$ 40,000 \\\hline \text { Reguired rate of retum } & 10 \% & 12 \% \\\hline\end{array}$


-
How long is the payback period for Investment B?

• A) 0.44 years
• B) 2.25 years
• C) 2.35 years
• D) 3.00 years

---

Definitions:

Homologous Chromosomes

Pairs of chromosomes in a diploid organism that are similar in shape, size, and genetic content, one inherited from each parent.

Prophase I

The first stage of meiosis I where homologous chromosomes pair up and exchange genetic material through recombination.

Chiasma

An X-shaped site in a tetrad usually marking the location where homologous (nonsister) chromatids previously crossed over.

Crossing-Over

A process in which genetic material (DNA) is exchanged between paired, homologous chromosomes.