Lamb Ltd Is Evaluating an Investment Proposal Using the Payback

question 4

Multiple Choice

Lamb Ltd is evaluating an investment proposal using the payback method. Cash inflows are expected to be $3000 in year 1, $3500 in year 2, $5000 in year 3, and $4500 in year 4. The initial investment required is $7000. Assuming even cash inflows within each year what is the payback period?

• A) 1.8 years
• B) 2.1 years
• C) 2.3 years
• D) 3.1 years

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Definitions:

Myelinization

The process of coating the axons of neurons with myelin, a fatty substance that speeds up signal transmission.

Electrical Impulses

Rapid signals transmitted along neurons, essential for the functioning of the nervous system and communication within the body.

Temporal Lobes

Brain regions located at the sides of the brain, involved in processing auditory information, memory, and integrating sensory input with emotions.

Fatty Sheath

A layer of fatty tissue, known as the myelin sheath, that surrounds the axons of some neurons, enabling faster transmission of electrical signals.