Question: 11
(Choose 1 answer)
Strange Manufacturing Company is purchasing a production facility at a cost of $21 million. The firm expects the
project to generate annual cash flows of $7 million over the next five years. Its cost of capital is 18 percent. What is
the payback period for this project?
A. 2.8 years
B. 3.0 years
C. 3.2 years
D. 3.4 years
