Abbie payback analysis of project

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Abbie's Attic Antiques is considering a project has a required payback period of three years. Which one of the following statements is correct concerning Abbie's payback analysis of this project?

The cash flows in each of the three years must exceed two-thirds of the project's initial cost if the project is to be accepted.

The cash flow in the final year of the project is ignored.

The project's cash flow in year three is discounted by a factor of (1 + R)3.

The cash flows in the second and third years are valued just as highly as the cash flow in the first year.

The project should be accepted if the payback period is equal to or greater than three years.

Reference no: EM133058504

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