(Ignore Income Taxes in This Problem $\begin{array}{lrr} \text {Years 1-10 } &£ 85,000\\ \text {Years 11 } &£(20,000)\\ \text { Years 12} &£ 95,000\\\end{array}$

question 29

Multiple Choice

(Ignore income taxes in this problem.) Murdock Company has a chance to make and sell a new plastic five-gallon container. The company estimates that the net cash flows (sales less cash operating expenses) arising from manufacture and sale of the new container would be as follows (numbers in parentheses indicate an outflow) : $\begin{array}{lrr} \text {Years 1-10 } &£ 85,000\\ \text {Years 11 } &£(20,000) \\ \text { Years 12} &£ 95,000\\\end{array}$

-Murdock would need to purchase production equipment costing £200,000 now to use in the manufacture of the new containers. This equipment would have a 12-year life and a £20,000 salvage value. Murdock Company's required rate of return is 12%. The payback period on this investment is (rounded to the nearest tenth of a year)

• A)2.0 years.
• B)2.4 years.
• C)3.0 years.
• D)3.4 years.

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Definitions:

Executive Functioning

Refers to cognitive processes including planning, working memory, attention, problem solving, verbal reasoning, inhibition, mental flexibility, task switching, and initiation and monitoring of actions.

Seattle Longitudinal Study

A long-term research project initiated by K. Warner Schaie examining cognitive development over the lifespan, starting with participants in adulthood and assessing them across multiple decades.

Mental Abilities

The cognitive capacities of an individual, including the ability to think, reason, solve problems, and adapt to new situations.

Age of 50

A reference to individuals who have reached the half-century mark in their lives.