You Are Considering a Project with an Initial Cost of $4,600.What

question 22

Multiple Choice

You are considering a project with an initial cost of $4,600.What is the payback period for this project if the cash inflows are $450,$970,$2,800,and $500 a year for Years 1 to 4,respectively?

• A)1.03 years
• B)2.36 years
• C)2.89 years
• D)3.76 years
• E)3.81 years

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Definitions:

Sales

Revenue generated from the sale of goods or services.

Desired Profit

The target earnings a company aims for in a specific period as part of its financial and strategic planning.

Unit Variable Cost

The cost associated with producing one additional unit of a product, excluding fixed costs.

Fixed Cost

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance.