What Is the Payback Period for Tangshan Mining Company's New

question 66

Multiple Choice

What is the payback period for Tangshan Mining company's new project if its initial after tax cost is $5,000,000 and it is expected to provide after-tax operating cash inflows of $1,800,000 in year 1, $1,900,000 in year 2, $700,000 in year 3 and $1,800,000 in year 4?

• A) 4.33 years
• B) 3.33 years
• C) 2.33 years
• D) none of the above

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Definitions:

Tibia

A large bone located in the lower leg, also known as the shinbone, that bears much of the body's weight.

Medial Malleolus

The bony prominence on the inner side of the ankle, forming part of the tibia bone.

Lateral Malleolus

The bony prominence on the outer side of the ankle, which is part of the fibula bone.

Fontanels

Soft spots on a baby's skull where the bones have not yet grown together, allowing for growth of the brain.