Brackett Corporation Is Adding a New Product Line That Will

question 108

Multiple Choice

Brackett Corporation is adding a new product line that will require an investment of $120,000.The product line is estimated to generate cash inflows of $25,000 the first year,$23,000 the second year,and $18,000 each year thereafter for ten more years.What is the payback period?

• A)4.80 years
• B)6.00 years
• C)6.32 years
• D)6.67 years

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Definitions:

Sense of Fairness

The inherent human perception and expectation of equitable treatment and justice in interactions and distributions within society.

Social Exchange Model

A model which takes an economic perspective and assumes that people approach relationships with an underlying motivation of self-interest.

Comparison Level

The expectation of how rewarding a relationship should be.

Fatuous Love

A type of love that is typified by commitment based on passion without the stabilizing influence of intimacy.