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:

Mediation

A form of conflict resolution where a neutral third party assists the disputing parties in reaching a consensus or settlement.

Nepotism

Favoritism granted to relatives or friends, especially in a work context, where they are given preferential treatment or opportunities.

Early Retirement Incentive Plans

Early Retirement Incentive Plans are programs offered by employers to encourage employees to voluntarily retire before their normal retirement age, often with enhanced benefits.

Payroll Costs

Expenses related to compensating employees, including wages, salaries, and benefits.