Use the discounted payback decision rule to evaluate this project. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Discounted payback years Should it be accepted or rejected?
Use the discounted payback decision rule to evaluate this project. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Discounted payback years Should it be accepted or rejected?
Chapter11: Capital Budgeting And Risk
Section: Chapter Questions
Problem 20P
Related questions
Question
![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 10 percent, and that the maximum allowable payback and discounted payback statistics for your company are 3.0 and
3.5 years, respectively.
Time:
1
2
4
5
Cash flow
-$244,000
$66,700
$84,900
$141,900
$122,900
$82,100
Use the discounted payback decision rule to evaluate this project. (Do not round intermediate calculations and round your final
answer to 2 decimal places.)
Discounted payback
years
Should it be accepted or rejected?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F53ad35f8-a0d0-48a5-a69b-1dd1b21d3221%2F28dc099c-1e9a-4731-a937-52582e64b594%2Fo1tqep_processed.png&w=3840&q=75)
Transcribed Image Text: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 10 percent, and that the maximum allowable payback and discounted payback statistics for your company are 3.0 and
3.5 years, respectively.
Time:
1
2
4
5
Cash flow
-$244,000
$66,700
$84,900
$141,900
$122,900
$82,100
Use the discounted payback decision rule to evaluate this project. (Do not round intermediate calculations and round your final
answer to 2 decimal places.)
Discounted payback
years
Should it be accepted or rejected?
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