A Company Is Considering Two Projects -Refer to the Figure

question 128

Multiple Choice

A company is considering two projects.
$$\begin{array} { l l l } & \text { Project A } & \text { Project B } \\\text { Initial investment } & \$ 150,000 & \$ 150,000 \\\text { Cash inflow Year 1 } & \$ 50,000 & \$ 40,000 \\\text { Cash inflow Year 2 } & \$ 50,000 & \$ 40,000 \\\text { Cash inflow Year 3 } & \$ 50,000 & \$ 40,000 \\\text { Cash inflow Year 4 } & \$ 50,000 & \$ 60,000 \\\text { Cash inflow Year 5 } & \$ 50,000 & \$ 80,000\end{array}$$
-Refer to the Figure.What is the payback period for Project B?

• A)2 years
• B)2.5 years
• C)3 years
• D)3.5 years

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Definitions:

Retirement Planning

The process of determining retirement income goals, risk tolerance, and the actions and decisions necessary to achieve those goals.

Retirement Decision Making

The process of planning and determining when and how to retire, which can involve financial, emotional, and lifestyle considerations.

Adjustment To Retirement

The process of adapting to a new lifestyle and identity after leaving one's career and transitioning into retirement, which can involve significant psychological and social changes.

Three Phases

Typically refers to a conceptual division of a process or period into three distinct stages for ease of analysis or understanding.