Compute the Payback Statistic for Project X and Recommend Whether

question 64

Multiple Choice

Compute the payback statistic for Project X and recommend whether the firm should accept or reject the project with the cash flows shown as follows if the appropriate cost of capital is 9 percent and the maximum allowable payback is four years.

• A) 3.4375 years, accept
• B) 3.78 years, reject
• C) 4.4375 years, reject
• D) 4.78 years, accept

---

Definitions:

Diathesis

A predisposition or vulnerability to developing a psychological disorder based on genetic or environmental factors.

Genetic Risk

Genetic risk refers to the probability of an individual developing a disease or condition based on the genes inherited from their parents.

Assorted Symptoms

A variety of signs or manifestations associated with a particular disease or condition, often differing in nature or severity.

Somatogenic Hypothesis

The theory that mental disorders result from physiological causes, such as brain function or genetics, rather than solely from psychological or environmental factors.