Use the Table for the Question(s)below

question 134

Multiple Choice

Use the table for the question(s) below.
Consider a project with the following cash flows:

-Assume the appropriate discount rate for this project is 15%.The payback period for this project is closest to:

• A)3
• B)2.5
• C)2
• D)4

---

Definitions:

Investment Project

A project undertaken by a company involving significant capital expenditure with the expectation of generating future profits.

Profitability Index

A calculation used to determine the relative profitability of an investment, based on the present value of future cash flows divided by the initial investment cost.

Internal Rate

Often refers to internal rate of return (IRR), a financial metric used to estimate the profitability of potential investments.

Cash Inflows

The money received by a business from its various sources during a specific period, such as sales revenue, investments, and financing.