Question
Compute the Payback statistic for Project X and recommend whether the firm should accept or reject the project with the cash flows shown below if
Compute the Payback statistic for Project X and recommend whether the firm should accept or reject the project with the cash flows shown below if the appropriate cost of capital is 11 percent and the maximum allowable payback is 4 years.
| Time: | 0 | 1 | 2 | 3 | 4 | 5 |
|---|---|---|---|---|---|---|
| Cash flow: | 2,900 | 800 | 750 | 950 | 900 | 475 |
Multiple Choice
-
2.44 years, Accept
-
3.44 years, Accept
-
2.44 years, Reject
-
3.44 years, Reject
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Finance And Occupational Pensions
Authors: Charles Sutcliffe
1st Edition
1349948624, 978-1349948628
