1) Assume the following information for a capital budgeting proposal with a five-year time horizon:...
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Accounting
1)
Assume the following information for a capital budgeting proposal with a five-year time horizon:
| Initial investment: | |
|---|---|
| Cost of equipment (zero salvage value) | $ 560,000 |
| Annual revenues and costs: | |
| Sales revenues | $ 300,000 |
| Variable expenses | $ 130,000 |
| Depreciation expense | $ 50,000 |
| Fixed out-of-pocket costs | $ 40,000 |
The payback period for this investment is closest to:
Multiple Choice
3.29 years.
7.00 years.
4.31 years.
1.98 years.
9)
If you invested $1,200 in a stock today and it earned an 19% return in each of the next three years, then the value of the stock at the end of three years would be closest to:
Multiple Choice
$2,052.
$2,092.
$2,022.
$1,932.
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