Shannon Co A) 161 Years
B) 1

question 94

Multiple Choice

Shannon Co. is considering a project that has the following cash flow and cost of capital (r) data. What is the project's discounted payback? $\begin{array} { l c c c c c } &r=10.00 \%\\\text { Year } &0& 1 & 2 & 3 & 4 \\\text { Cash flows } & - \$ 950 & \$ 525 & 485 & 445 & 405\end{array}$

• A) 1.61 years
• B) 1.79 years
• C) 1.99 years
• D) 2.22 years
• E) 2.44 years

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Definitions:

Incorporator

The individual or entity responsible for filing the formal documents needed to legally form a corporation.

Subchapter S

A section of the United States tax code that allows for a corporation's income to be taxed directly to the shareholders, thus avoiding double taxation.

Internal Revenue Code

The statutory collection of domestic tax laws that govern federal tax administration in the United States.

Shareholder Level

Refers to the status or category of ownership in a corporation, where individuals or entities own shares representing a portion of the company.