Consider a firm with a cost of capital of 10.5%, considering investing in a project that will generate the following expected after-tax net cash-flows:

Question 1.

What is the Discounted Payback Period for this project?

a. 2.98 years

b. 3.59 years

c. 3.98 years

d. none of the above

e. 2.82 years

Question 2.

if the firm has a specified threshold of 3 years, based on discounted payback period method, should you accept this project?

a. yes

b. no

Year(t) 0 1 2 After tax net cash flow($CF) -6,500 3,000 1,070 2,950 1,100 4