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 $12$ percent, and that the

maximum allowable payback and discounted payback statistic for the project are $2$ and $3$ years, respectively.

Use the payback decision rule to evaluate this project; should it be accepted or rejected?

Multiple Choice

$2\mathrm{.}69$ years, reject

$0$ years, accept

$1\mathrm{.}11$ years, accept

$4\mathrm{.}00$ years, reject