The Calculation of the Payback Period for an Investment When

question 119

Multiple Choice

The calculation of the payback period for an investment when net cash flow is even (equal) is:

• A) (cost of investment)/(annual net cash flow)
• B) (cost of investment)/(total net cash flow)
• C) (annual net cash flow)/(cost of investment)
• D) (total net cash flow)/(cost of investment)
• E) (total net cash flow)/(annual net cash flow)

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Definitions:

Nikkei Index

A stock market index for the Tokyo Stock Exchange, representing the performance of leading Japanese companies.

Futures Price

The agreed price for the future sale or purchase of an asset in a futures contract.

Futures Exchange

A central marketplace where individuals can buy and sell futures contracts and options on futures contracts.

Delivery Date

The specific date on a futures or options contract on which the underlying asset must be delivered or settled.