The Management of Nebraska Corporation Is Considering the Purchase of a New

question 62

Multiple Choice

The management of Nebraska Corporation is considering the purchase of a new machine costing $490,000. The company's desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for 1 through 5 years are 0.909, 0.826, 0.751, 0.683, and 0.621, respectively. In addition to the foregoing information, use the following data in determining the acceptability in this situation: The cash payback period for this investment is:

• A) 5 years
• B) 4 years
• C) 2 years
• D) 3 years

---

Definitions:

Social Desirability Bias

The tendency of respondents to answer questions in a manner that will be viewed favorably by others, leading to distortion in self-report measures.

Acquiescence

The act of agreeing or submitting to something passively, without protest.

Anecdotal Evidence

Evidence based on personal accounts, observations, or stories, rather than on systematic scientific research or statistics.

Case Studies

A research method involving the detailed examination of an individual or group, providing in-depth data and insights into complex issues.