Question
Mr. Brown is considering a project that costs $15,000. The project produces cash inflows of $3,000, $5,000, $7,000, and $3,000 respectively for the next four
Mr. Brown is considering a project that costs $15,000. The project produces cash inflows of $3,000, $5,000, $7,000, and $3,000 respectively for the next four years. Mr Brown wants to recoup his money within 3 years after applying a 6% discount rate. He should:
A.)Reject this project because the payback period is 2.78 years.
B.) Accept the project because it produces $15,534 on a discounted payback basis.
C.) Reject this project because the discounted payback period is 3.78 years.
D.) Accept this project because the discounted payback period is 2.78 years.
E.)Accept this project because the payback period is exactly 3 years.
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