Suzanne's Cleaners Is Considering a Project That Has the Following

question 44

Multiple Choice

Suzanne's Cleaners is considering a project that has the following cash flow data. What is the project's payback?
$\begin{array}{lcccccc}\text { Year } & 0 & 1 & 2 & 3 & 4 & 5 \\\text { Cash flows }& -\$ 1,100 & \$ 300 & \$ 310 & \$ 320 & \$ 330 & \$ 340\end{array}$

• A) 2.31 years
• B) 2.56 years
• C) 2.85 years
• D) 3.16 years
• E) 3.52 years

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Definitions:

Significant Influence

The power to participate in the financial and operating policy decisions of an investment but is not control or joint control of those policies.

Voting Stock

Shares that grant the holder the right to vote on company matters, such as electing the board of directors.

Profit Margin

A financial metric indicating the percentage of revenue that exceeds the cost of goods sold, serving as a measure of a company's profitability.

Total Asset Turnover

A metric assessing how effectively a company utilizes its assets to produce income.