A Firm Is Evaluating a Potential Investment That Is Expected

question 117

Multiple Choice

A firm is evaluating a potential investment that is expected to generate cash flows of $100 in years 1 through 4 and $400 in years 5 through 7. The initial investment is $750. What is the payback for this investment?

• A) 4.88 years
• B) 4.48 years
• C) 5.88 years
• D) 5.48 years

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Definitions:

Stepping Motor

A motor designed to move in discrete steps, enabling precise control over its motion and position.

Output Shaft

The shaft on a machine or engine that transfers power to the driven components.

Input Pulse

A transient electrical signal or voltage of short duration that is used in digital circuits and signal processing.

Constant Speed

A state where an object or device moves at a steady rate without acceleration or deceleration.