1) A company's 'bottom line' or net income increases. Which of the following statements is most correct?
A)The only possible cause is that sales increased.
B) The only possible cause is that expenses dropped.
C) Either sales increased, expenses decreased, or both may have happened
D) The only possible cause is that both sales must have increased and expenses must have decreased at the same time.
2) A project will cost $15,000 in total investment. The cash flows are as follows: Year 1: $5,000; Year 2: $3,000; Year 3: $6,000; Year 4: $8,000; Year 5: $7,000. Assume the cash flows are distributed evenly throughout the year. Calculate the exact payback period.
A) 4 Years B) 3 Years C) 3.50 Years D) 3.13 Years