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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
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 2.0 and 3.0 years, respectively.
Time: | 0 | 1 | 2 | 3 | 4 | 5 | 6 |
Cash flow: | $4,600 | $1,120 | $2,320 | $1,520 | $1,520 | $1,320 | $1,120 |
Use the discounted payback decision rule to evaluate this project. (Round your answer to 2 decimal places.)
Should it be accepted or rejected? multiple choice
rejected
accepted
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