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 statistics for the project are 3.5 and 4.5 years, respectively. Time: 0 1 2 3 4 5 6 Cash flow: −$5,000 $1,230 $2,430 $1,630 $1,550 $1,430 $1,230 Use the payback decision rule to evaluate this project. (Round your answer to 2 decimal places.) Payback:
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 statistics for the project are 3.5 and 4.5 years, respectively. Time: 0 1 2 3 4 5 6 Cash flow: −$5,000 $1,230 $2,430 $1,630 $1,550 $1,430 $1,230 Use the payback decision rule to evaluate this project. (Round your answer to 2 decimal places.) Payback:
Chapter11: Capital Budgeting And Risk
Section: Chapter Questions
Problem 14P
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Suppose your firm is considering investing in a project with the cash flows shown below, that the required
Time: | 0 | 1 | 2 | 3 | 4 | 5 | 6 |
Cash flow: | −$5,000 | $1,230 | $2,430 | $1,630 | $1,550 | $1,430 | $1,230 |
Use the payback decision rule to evaluate this project. (Round your answer to 2 decimal places.)
Payback: ? Years
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