Neighbors Corporation Is Considering a Project That Would Require an Investment

question 21

Multiple Choice

Neighbors Corporation is considering a project that would require an investment of $279,000 and would last for 8 years.The incremental annual revenues and expenses generated by the project during those 8 years would be as follows: The scrap value of the project's assets at the end of the project would be $15,000.The cash inflows occur evenly throughout the year.The payback period of the project is closest to:

• A)2.0 years
• B)2.6 years
• C)2.5 years
• D)1.9 years

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Definitions:

Aggregate Demand

The total amount of goods and services that all consumers, businesses, and government entities are willing and able to purchase at various price levels in an economy.

Tax Cut

A reduction in the amount of taxes imposed by the government, which can affect individual income, corporate profits, or specific goods and services, leading to potential increases in consumer spending or investment.

Aggregate Demand

The sum of desires for all goods and services in an economy, noted at a fixed wide-ranging price level over a predetermined period.

Stock-market Boom

A time marked by swift and considerable growth in stock market prices, typically mirroring positive economic expectations.