Its a grid= Time/ Cash flow for years 0-6 Suppose your firm is considering investing in a
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Its a grid= Time/ Cash flow for years 0-6
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 11 percent, and that the maximum allowable payback and discounted payback statistic for the project are 2 and 3 years, respectively.
Time: 01 23 4 56
Cash Flow: -1,040140460660 660260660
Use the discounted payback decision rule to evaluate this project; should it be accepted or rejected?
3.13 years, reject
3.15 years, reject
2.78 years, accept
2.87 years, accept
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