Payback: Binder Corp

question 83

Multiple Choice

Payback: Binder Corp. has invested in new machinery at a cost of $1,450,000. This investment is expected to produce cash flows of $640,000, $715,250, $823,330, and $907,125 over the next four years. What is the payback period for this project?

• A) 2.12 years
• B) 1.88 years
• C) 4.00 years
• D) 3.00 years.

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Definitions:

Planning Budget

A budget prepared at the beginning of a period, reflecting the expected financial situation based on forecasted activities and conditions.

Tenant-Days

A measure used in the hospitality or healthcare industry, representing the total number of days that all tenants or patients have occupied the facility.

Planning Budget

A budget based on the level of planned output at the start of the budgetary period, used for planning purposes.

Total Expenses

The sum of all costs and expenses incurred by a business or individual, including operating expenses, cost of goods sold, and taxes.