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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 risk class is 8 percent, and that the maximum allowable payback and discounted payback statistic for the project are 3 and 3.5 years, respectively.

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

a. -.39%, reject

b. .39%, accept

c. -38.88%, reject

d. 38.88%, accept

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91612003

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