Author Question: Some firms use the payback period as a decision criterion or as a supplement to sophisticated ... (Read 83 times)

P68T · **on:** Apr 25, 2021

Question 1

Sara Flea Collar Inc. is evaluating an overseas expansion that will cost $1 million and is expected to generate the following cash flows: year 1: -$250,000; year 2: +$450,000; year 3: +$550,000; and year 4: +$800,000. What is the payback period?
◦ 3.00 years
◦ 3.13 years
◦ 3.31 years
◦ 3.75 years
◦ 4.00 years

Question 2

Some firms use the payback period as a decision criterion or as a supplement to sophisticated decision techniques, because
◦ it explicitly considers the time value of money.
◦ it can be viewed as a measure of risk exposure.
◦ the determination of payback is an objectively determined criteria.
◦ it can take the place of the net present value approach.

Jmfn03 · **Reply #1 on:** Apr 25, 2021

A FREE account is required to view all solutions!

Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.

Answer Preview

Only 50% of students answer this correctly