A company is considering the purchase of a new piece of equipment for $90,000. Predicted annual cash inflows from this investment are $36,000 (year 1), $30,000 (year 2), $18,000 (year 3), $12,000 (year 4) and $6,000 (year 5). The payback period is:
A. 2.50 years.
B. 3.00 years.
C. 3.50 years.
D. 4.50 years.
E. 4.25 years.
Answer: C
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Back Company sold merchandise on credit. Its gross profit ratio is 23%. The effect of this transaction is that the
a. earnings per share decreased b. current ratio was unchanged c. debt-to-equity ratio increased d. earnings per share increased
Exploratory research is suitable for generating alternative courses of action and research questions
Indicate whether the statement is true or false
When the equity method is used to account for an investment in stock, the investor will report its share of the investee's annual earnings as income regardless of how much the investee distributes in the form of dividends
Indicate whether the statement is true or false