Question
Consider the following scenario (the given information is the same as in the previous question): Suppose we have a project that requires an initial investment
Consider the following scenario (the given information is the same as in the previous question): Suppose we have a project that requires an initial investment of $1,000. It will provide the cash inflows of $500 in year 1, $300 in year 2, and $100 each year hereafter (starting in year 3). The required rate of return is 10% for this project. Suppose we have a 6-year payback cutoff. Based on the payback period rule, the payback period for this project is ________ years and we should ________ this project.
Question 36 options:
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A) | 5; accept |
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B) | 4; reject |
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C) | 5; reject |
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D) | 4; accept |
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