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Jordan Enterprises in considering a capital expenditure that requires an initial investment of $42,000 and returns after-tax cash inflows of $7,000 per year for 10 years. The firm has a maximum acceptable payback period of 8 years.

a. Determine the payback period for this project.

b. Should the company accept the project? Why or why not?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M943849

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