If an Investment Costs $140,000 with No Residual Value,an Expected

question 36

Multiple Choice

If an investment costs $140,000 with no residual value,an expected increase in net income of $35,000 and a 5-year useful life,the payback period would be:

• A)2.2 years.
• B)4 years.
• C)5 years.
• D)2 years.

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Definitions:

Property Rights

Legal rights to possess, use, and dispose of assets, including intellectual property or real estate.

Capital Goods

Physical assets that a company uses in the production process to manufacture products and services that consumers will later use.

Specialization

The process of focusing resources on the production of specific goods or services to achieve greater efficiencies and economies of scale.

Economically Beneficial

Activities or decisions that result in a net gain in economic value, improving the economic welfare of individuals or society as a whole.