A Firm Is Evaluating a Proposal Which Has an Initial

question 8

Multiple Choice

A firm is evaluating a proposal which has an initial investment of $50,000 and has cash flows of $15,000 per year for five years. The payback period of the project is ________.

• A) 1.5 years
• B) 2 years
• C) 3.3 years
• D) 4 years

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Definitions:

Management Philosophy

A belief system or set of principles that influence how an organization is managed and how it makes decisions.

External Adaptation

The process by which an organization adjusts its strategies, goals, and processes in response to changes in its external environment.

Top Managers

Senior executives responsible for the strategic direction and overall success of an organization, typically including roles such as CEO, CFO, and COO.

Strong Cultures

Strong cultures are organizational environments characterized by shared beliefs, values, and practices that strongly influence member behavior and contribute to organizational coherence.