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Problem 13-18 Discounted Payback (LG13-2) Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of
Problem 13-18 Discounted Payback (LG13-2)
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 8 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively. |
Time: | 0 | 1 | 2 | 3 | 4 | 5 | 6 |
Cash flow | $4,900 | $1,260 | $2,460 | $1,660 | $1,660 | $1,460 | $1,260 |
Use the discounted payback decision rule to evaluate this project. (Round your answer to 2 decimal places.) |
Discounted payback | years |
Should it be accepted or rejected? |
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