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Suppose your firm is considering investing in a project with the cash flows shown as follows, that the required rate of return on projects of
Suppose your firm is considering investing in a project with the cash flows shown as follows, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback for the project is three and three years Time 0 2 4 Cash Flow -100,000 30,000 45,000 55,000 30,000 10,000 A. Use the payback decision rule to evaluate this project; should it be accepted or re jected? B, Use the net present value decision rule to evaluate this project: should it be accepted or rejected? C. Use the Internal Rate of Return decision rule to evaluate this project; should it be accepted or rejected? D. Use the Profitability Index decision rule to evaluate this project; should it be accepted or rejected bases on this computation
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