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A Firm Is Evaluating a Capital Budgeting Project That Generates

Question 3

Multiple Choice

A firm is evaluating a capital budgeting project that generates cash inflows equal to $50 per year for the next five years. If the project's traditional payback period (PB) is 3.6 years, what is its initial cost?


A) $200
B) $120
C) $180
D) $140
E) $150

Correct Answer:

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