Use the Following Information to Answer the Following Question

question 41

Multiple Choice

Use the following information to answer the following question.
Below are the expected after-tax cash flows for Projects Y and Z.Both projects have an initial cash outlay of $20,000 and a required rate of return of 17%.
Project Y Project Z

-MacHinery Manufacturing Company is considering a three-year project that has a cost of $75,000.The project will generate after-tax cash flows of $33,100 in year 1, $31,500 in year 2, and $31,200 in year 3.Assume that the firm's proper rate of discount is 10% and that the firm's tax rate is 40%.What is the project's payback period?

• A)0.33 years
• B)1.22 years
• C)2.33 years
• D)Three years

Understand the basic concepts of probability, including independent and dependent events.

Calculate probabilities for single events.

Evaluate the probabilities of compound events using appropriate formulas.

Apply the concepts of probability to real-life scenarios.

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Definitions:

Depreciation

The reduction in the value of an asset over time due to wear and tear or obsolescence.

Dollar

The basic monetary unit used in the United States and other countries, symbolized by $.

Exports

Goods or services produced in one country and sold to buyers in another country.

Financial Account

Refers to a component of a country's balance of payments that records investments and financial transactions, including investments in foreign securities and direct investments.