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18. Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of

18.

Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively.

Time: 0 1 2 3 4 5 6
Cash flow $5,000 $1,230 $2,430 $1,630 $1,630 $1,430 $1,230

Use the discounted payback decision rule to evaluate this project. (Round your answer to 2 decimal places.)

Discounted payback years

Should it be accepted or rejected?

Rejected
Accepted

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