J&J Manufacturing Is Considering a Project with the Following Cash $\begin{array}{ll}\text { Year } & \text { CF } \\0 & (100,000) \\1 & 40,000 \\2 & 50,000 \\3 & 50,000\end{array}$

question 54

Multiple Choice

J&J Manufacturing is considering a project with the following cash flows. Calculate the payback period of the project. $\begin{array}{ll}\text { Year } & \text { CF } \\0 & (100,000) \\1 & 40,000 \\2 & 50,000 \\3 & 50,000\end{array}$

• A) 1.2 years
• B) 2.2 years
• C) 3.2 years
• D) 4.2 years

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Definitions:

Holding Constant

A method in analysis where certain variables are kept unchanged in order to isolate the effect of other variables.

Increase

A rise in quantity, size, amount, or degree.

Independent Variables

These are factors in a model or experiment that are adjusted or classified to examine their influence on the outcomes measured by dependent variables.

Error Variable

A random variable in statistical models representing the amount by which an observed outcome deviates from the predicted outcome, due to unexplained or random effects.