You are given a project with the following projected cash flows:

Year 0 = -300,000

Year 1 = 200,000

Year 2 = 200,000

Year 3 = 200,000

The CEO has determined that if the payback period or discounted payback period method is used for evaluation, any project must pay back within 2 years to be accepted.

Would you accept or reject the project using the payback method of evaluation?

A.

Reject

B.

Accept

C.

Indifferent between accepting and rejecting

D.

Not enough information provided to decide

How long does this project take to pay back using the discounted payback period method, assuming a 10% discount rate?

Round your answer to the nearest tenth of a year (i.e. 5.5 years).

nothing

years

What is the NPV of this project at a 10% discount rate? Please round your answer to the nearest dollar.

nothing