Question
Consider the following table that shows expected annual cash flows from a proposed investment. Year Cash Flow 0 $70 1 $20 2 $30 3 $30
Consider the following table that shows expected annual cash flows from a proposed investment.
| Year | Cash Flow |
| 0 | $70 |
| 1 | $20 |
| 2 | $30 |
| 3 | $30 |
| 4 | $30 |
If the annual required return is 15%, what is the payback period of the project (rounded to the first decimal)? If the firms cutoff discounted payback period is 3 years, should it accept the project?
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Ethics In Finance
Authors: John R. Boatright
3rd Edition
1118615824, 978-1118615829
