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.