PRINCIPLES OF MANAGERIAL FINANCE (SUBSCR
PRINCIPLES OF MANAGERIAL FINANCE (SUBSCR
15th Edition
ISBN: 9780137695621
Author: SMART
Publisher: PEARSON C
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Chapter 10, Problem 10.1P

Payback period The Ball Shoe Company is considering an investment project that requires an initial investment of $542.000 and returns after-tax cash inflows of $75,000 per year for 10 years. The firm has a maximum acceptable payback period of 8 years.

  1. a. Determine the payback period for this project.
  2. b. Should the company accept the project? Why or why not?
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