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:

Working Memory Capacity

The amount of information that can be held in working memory at one time, critical for reasoning and the guidance of decision-making and behavior.

Episodic Memory

A type of long-term memory that involves the recollection of specific events, situations, and experiences, including contextual details of time and place.

Flashbulb Memory

Highly detailed and vivid memories of significant or shocking events, which are remembered with great accuracy as though they were captured by a camera.

Individual Items

Separate, distinct objects or units each considered as single entities.