2. value:

10.00 points

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 12 percent, and that the maximum allowable payback and discounted payback statistic for the project are 2 and 3 years, respectively.

Time	0	1	2	3	4	5	6
Cash Flow	-980	180	420	620	620	220	620

Use the payback decision rule to evaluate this project; should it be accepted or rejected?

A. 4.00 years, rejectB. 2.61 years, rejectC. 1.29 years, acceptD. 0 years, accept

3. value:

10.00 points

Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below. The required rate of return on projects of both of their risk class is 10 percent, and that the maximum allowable payback and discounted payback statistic for the projects are 2 and 3 years, respectively.

Time:	0	1	2	3
Project A Cash Flow	-27,000	17,000	37,000	8,000
Project B Cash Flow	-37,000	17,000	13,000	57,000

Use the payback decision rule to evaluate these projects; which one(s) should be accepted or rejected?

A. accept both A and BB. accept A, reject BC. accept neither A nor BD. reject A, accept B 4. value: 10.00 points 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 10 percent, and that the maximum allowable payback and discounted payback statistic for the project are 2 and 3 years, respectively.

Time	0	1	2	3	4	5	6
Cash Flow	-700	90	550	750	750	350	750

Use the PI decision rule to evaluate this project; should it be accepted or rejected? A. 2.21%, accept B. 2.21%, reject C. -221.00%, reject D. 221.83%, accept