Question
A project has the following cash flows: Year Cash Flow0 -$4,2001 1,9002 1,8003 1,6004 500 a) Calculate the payback period of the project. b) If
A project has the following cash flows: Year Cash Flow0
-$4,2001
1,9002
1,8003
1,6004
500
a) Calculate the payback period of the project. b) If the cutoff period is three years, should this project be accepted? Why or why not?
Step by Step Solution
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Step: 1
Project Analysis Payback Period and DecisionMaking a Payback Period Calculation Accumulate cash flows year by year YearCash FlowAccumulated Cash Flow 042004200 119002300 21800400 316001200 45001700 Identify the year where the accumulated cash flow ...
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Practical Financial Management
Authors: William R. Lasher
8th edition
1305637542, 978-1305887237, 1305887239, 978-1305637542
