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

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Definitions:

Least-square Regression

Rephrasing of KT-14; Refers to the method used to find the line that minimizes the sum of the squares of the differences between observed and predicted values.

Vector-borne Disease

Infectious diseases transmitted by vectors, such as mosquitoes, ticks, and fleas, that spread pathogens between humans or from animals to humans.

Malaria

A serious and sometimes fatal disease caused by Plasmodium parasites that are transmitted to people through the bites of infected Anopheles mosquitoes.

Strong Correlation

A statistical measure that indicates a high degree of linear relationship between two variables, showing that when one variable changes, the other has a predictable change too.