Which of the Following Would Be the Best Basis on Whether

question 52

Multiple Choice

Which of the following would be the best basis on whether to accept an investment opportunity or not?

• A)if it has positive total cash inflows
• B)if it has a payback period in less than 10 years
• C)if the investment's rate of return is higher than the company's current year required rate of return
• D)if the net present value is positive

---

Definitions:

FICA

Refers to the Federal Insurance Contributions Act and represents taxes that are deducted to fund Social Security and Medicare programs in the United States.

Federal Income Taxes

Taxes imposed by the government on the annual income of individuals, corporations, trusts, and other legal entities.

State Income Taxes

Taxes levied by individual states on the income of individuals and businesses within their jurisdiction.

Payroll Taxes

Taxes that are withheld from employees' wages or paid by employers on behalf of their employees, typically including social security and medicare taxes.