Solution-Accept the project based on the payback period

Accept the project based on the payback period

Reference no: EM133120807

A project has an initial cost of $200,000. Further, it is expected to bring in the following cash flows: $45,000 in year 1; $50,000 in year 2; $75,000 in year 3; $100,000 in year 4. Assume that WACC is 18%, and the firm wants to recover its initial investment in 3.75 years. What is the payback period and would the firm accept the project based on the payback period?

Reference no: EM133120807

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Accept the project based on the payback period

Reference no: EM133120807

Reference no: EM133120807

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