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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 9 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively. Time: Cash flow: 0 -$5,200 1 $1,250 2 $2,450 $1,650 $1,570 5 $1,450 6 $1,250 Use the payback decision rule to evaluate this project. (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Payback 3.61 X years Should it be accepted or rejected? rejected accepted
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