An Investment of $180,000 Is Expected to Generate $100,000 in Cost

question 54

Multiple Choice

An investment of $180,000 is expected to generate $100,000 in cost savings annually for three years.Assume straight-line depreciation is used.Ignore income taxes.What is the payback period?

• A)0.80 years
• B)1.80 years
• C)1.88 years
• D)3.00 years

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Definitions:

Tick Size

The minimum price movement of a trading instrument in the market, which can affect the precision of price and order placement.

Bid-Ask Spread

The difference between the highest price a buyer is willing to pay (bid) and the lowest price a seller is willing to accept (ask) for an asset.

Dealers

Individuals or entities that act as principals in buying and selling securities for their own account.

Market Inefficiencies

These are situations where the current price of a security does not fully reflect all available information, potentially allowing investors to earn above-average returns.