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4. Suppose your firm is considering investing in a project with the cash flows shown as follows, that the required rate of return on projects
4. 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 8 percent, and that the maximum allowable payback and discounted payback statistic for the project are three and three and a half years, respectively. Time Cash Flow Cine Flow 400.000 30.000 2.000 $5,000 $0.00 10.000 -100,000 30,000 45,000 55,000 30,000 10,000 Calculate the payback and use the payback decision rule to evaluate this project; should it be accepted or rejected? Show your calculations
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