The Seattle Corporation Has Been Presented with an Investment Opportunity

question 71

Multiple Choice

The Seattle Corporation has been presented with an investment opportunity which will yield cash flows of $30,000 per year in Years 1 through 4,$35,000 per year in Years 5 through 9,and $40,000 in Year 10.This investment will cost the firm $150,000 today,and the firm's required rate of return is 10 percent.Assume cash flows occur evenly during the year,1/365th each day.What is the payback period for this investment?

• A) 5.23 years
• B) 4.86 years
• C) 4.00 years
• D) 6.12 years
• E) 4.35 years

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Definitions:

Collectivist Culture

A type of culture where people prioritize the group over individual goals and values.

Generous

Being willing to give more of something, such as money or time, than is strictly necessary or expected.

Actual Self-views

An individual's perception of their own real attributes, capabilities, and characteristics, as opposed to their ideal self or how others perceive them.

Michelangelo Phenomenon

The concept that close relationships can help individuals sculpt each other towards their ideal selves.