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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 and discounted payback statistic for the project are two and two and .25 years respectively.
| Time Years | 0 | 1 | 2 | 3 | 4 | 5 | 6 |
| Cash Flow | -150,000 | 30,000 | 50,000 | 45,000 | 25000 | 35000 | 10000 |
Use the payback decision rule to evaluate this project; should it be accepted or rejected?
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