Consider the Following Four-Year Project

question 54

Multiple Choice

Consider the following four-year project.The initial outlay or cost is $180,000.The respective cash inflows for years 1,2,3 and 4 are: $100,000,$80,000,$80,000 and $20,000.What is the discounted payback period if the discount rate is 11%?

• A)About 1.667 years
• B)About 2.000 years
• C)About 2.135 years
• D)About 2.427 years

Analyze the incentives and profits under cartel arrangements.

Comprehend the role and outcomes of collusion in oligopoly markets compared to monopoly.

Understand the application of game theory to oligopoly markets.

Recognize the effects of the number of firms in an oligopoly on market outcomes.

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Definitions:

Foreign Firms

Companies that are based in one country but operate and conduct business in other countries.

EAFE Index

An index that measures the stock market performance of developed markets outside of the United States and Canada.

Non-U.S. Stocks

Shares of companies based outside of the United States, often used to diversify investment portfolios.

CAPM

The Capital Asset Pricing Model, a theory that describes the relationship between risk and expected return for assets, particularly stocks.