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A farmer is contemplating buying a new tractor, which costs $150,000. It is expected to bring in an additional cash flow of $35,000 per year
A farmer is contemplating buying a new tractor, which costs $150,000. It is expected to bring in an additional cash flow of $35,000 per year for the next ten years. Which of the following statements is true if she uses the payback rule to make the investment decision, with the desired payback being 5 years or less? The project should be accepted since the payback period is 5 years. The project should be rejected since the payback period is 5 years. The project should be accepted since the payback period is 4.28 years. The project should be rejected since the payback period is 4.28 years
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