Craig's Car Wash Inc $\begin{array}{lcccc}&r=10.00 \%\\\text { Year } & 0 & 1 & 2 & 3 \\ \text { Cash flows } & -\$ 900 & \$ 500 & \$ 500 & \$ 500\end{array}$

question 107

Multiple Choice

Craig's Car Wash Inc. is considering a project that has the following cash flow and cost of capital (r) data. What is the project's discounted payback? $\begin{array}{lcccc}&r=10.00 \%\\\text { Year } & 0 & 1 & 2 & 3 \\ \text { Cash flows } & -\$ 900 & \$ 500 & \$ 500 & \$ 500\end{array}$

• A) 1.88 years
• B) 2.09 years
• C) 2.29 years
• D) 2.52 years
• E) 2.78 years

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Definitions:

Production Volume

The quantity of goods that are produced within a specified period of time.

Variable Manufacturing Cost

Costs that vary directly with the level of production output, including direct materials and variable labor costs.

Production Volume

The total number of units produced during a specific period, reflecting the level of manufacturing activity.

Fixed Manufacturing Cost

Costs that remain constant regardless of the level of production or sales activities, such as salaries, rent, and depreciation on manufacturing equipment.