A Firm Is Evaluating a Proposal Which Has an Initial

question 21

Multiple Choice

A firm is evaluating a proposal which has an initial investment of $35,000 and has cash flows of $10,000 in year 1, $20,000 in year 2, and $10,000 in year 3. The payback period of the project is ________.

• A) 1 year
• B) 2 years
• C) between 1 and 2 years
• D) between 2 and 3 years

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Definitions:

Attitude

A fixed mindset or emotional stance towards a particular thing, typically evident in how an individual acts.

Functional Theory

A perspective in sociology and psychology that emphasizes the functions of behavior, institutions, and processes in society and individual psychology.

Attitudes

A psychological tendency expressed by evaluating a particular entity with some degree of favor or disfavor.

Motives

Internal driving forces that cause a person to take action or behave in a particular way.