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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 7 percent, and that the maximum allowable payback and discounted payback statistics for the project are 2.5 and 3.5 years, respectively.

Time: 0 1 2 3 4 5 6

Cash flow –$4,700 $1,170 $2,370 $1,570 $1,570 $1,370 $1,170

Use the payback decision rule to evaluate this project. (Round your answer to 2 decimal places.)

Payback years

Should it be accepted or rejected?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91787243

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