BUS330 01 Fall 2017 Nugent Test: Test Three FINAL Exam (8 9,10) g:02 1335 Subeit

ID: 2803597 • Letter: B

Question

BUS330 01 Fall 2017 Nugent Test: Test Three FINAL Exam (8 9,10) g:02 1335 Subeit Test This Question: 5 pts This Test: 100 pts payback peniod of 8 years a. Determine the payback period for this project b. Should the company accept the project? a. The payback period for this project isyears (Round to two decimal places) b. Should the company accept the project? (Select the best answer below.) O A. The company should reject the project since the payback period is less than the number of years of the after tax cash flows O B. The company should accept the project since the payback period is less than the maximum O D· The company should repect the proiect srce the payback period s less than te maximum O E. The company should accept the project since the after-tax cash flows occur for more years Click to select your answer(s) ^40.aan Type here to 8 9 6

Explanation / Answer

initial investment

57000

annual income

11679

pay back period

initial investment/annual operating income

4.880555

Yes company should accept the project as Payback period is 4.88 years which is less than the minimum period of 8 years

answer is D