Consider a Project with the Following Cash Flows: Assume

question 90

Multiple Choice

Consider a project with the following cash flows: Assume the appropriate discount rate for this project is 13%. The payback period for this project is closest to ________.

• A) 2.88 years
• B) 2.40 years
• C) 1.92 years
• D) 3.60 years

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Definitions:

Tangible

Referring to physical objects or assets that can be seen, touched, and quantified, as opposed to intangible items like rights or patents.

Conditional Sales Contract

A type of contract in which the sale itself is contingent on approval; can be either a sale-on-approval contract or a sale-or-return contract.

Lease Contracts

Agreements in which one party (the lessor) grants another party (the lessee) the right to use property, equipment, or facilities for a specified time in exchange for payment.

Sale-Or-Return Contract

A contract in which the buyer and seller agree that the buyer may return the goods at a later time.