A Company Is Considering the Purchase of a New Piece

question 158

Multiple Choice

A company is considering the purchase of a new piece of equipment for $90,000. Predicted annual cash inflows from this investment are $36,000 (year 1) , $30,000 (year 2) , $18,000 (year 3) , $12,000 (year 4) and $6,000 (year 5) . The payback period is:

• A) 2.50 years.
• B) 3.50 years.
• C) 3.00 years.
• D) 4.50 years.
• E) 4.25 years.

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Definitions:

Motor Neurons

Neurons that transmit signals from the spinal cord to muscles, effectively converting neural messages into muscle movements.

Cervical

Cervical pertains to the neck region in the human body or the part of the spine known as the cervical spine, which comprises the seven vertebrae connecting the skull to the thoracic spine.

Lumbar

Referring to the lower part of the spine, specifically the five vertebrae between the rib cage and the pelvis.