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

question 49

Multiple Choice

The management of Zesty Corporation is considering the purchase of a new machine costing $400,000. 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:

Unemployment Rate

The proportion of the workforce that is without a job and is actively seeking work.

Labor Force

The total number of people, including both employed and unemployed individuals, who are of working age and willing to work.

U.S. Population

The total number of people residing within the United States, a demographic figure that changes due to births, deaths, and migration.

Discouraged Workers

Individuals not currently looking for work because they believe no jobs are available for them.