Problem 13-3 Payback (LG13-2)

Compute the payback statistic for Project B if the appropriate cost of capital is 12 percent and the maximum allowable payback period is three years.

Project B

Time:	0	1	2	3	4	5
Cash flow:	$ 11,900	$ 3,440	$ 4,360	$ 1,700	$ 0	$ 1,180

Should the project be accepted or rejected?

Note: If the project never pays back, then enter a "0" (zero).

Payback ________years?