Stern Associates Is Considering a Project That Has the Following

question 53

Multiple Choice

Stern Associates is considering a project that has the following cash flow data.What is the project's payback?

• A) 2.89 years
• B) 2.92 years
• C) 3.40 years
• D) 3.21 years
• E) 3.92 years

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Definitions:

Direct Materials Costs

The expense incurred for raw materials that are directly traceable and allocable to a finished product.

Predetermined Rate

A rate calculated before a period begins, used to allocate costs or apply charges in various accounting practices.

Direct Labor Cost

The expense of paying workers who physically produce the goods.

Direct Materials

The raw materials that are directly used in the manufacturing process of a product.