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

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38. Suppose your firm is considering investing in a project with the cash flows shown as follows, 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 two and two and a half years, respectively. Time 0 1 2 4 5 Cash Flow -125,000 65,000 78,000 105,000 105,000 25,000 Use the payback decision rule to evaluate this project; should it be accepted or rejected? A. 0.23 years, accept B. 1.77 years, accept C. 2 years, accept D. 4.33 years, reject

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