Allowable payback and discounted payback statistic

Assignment Help Financial Management

Reference no: EM131609793

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 12 percent, and that the maximum allowable payback and discounted payback statistic for the project are 2 and 3 years, respectively.

Time 0 1 2 3 4 5 6

Cash Flow -1,150 30 570 770 770 370 770

Use the payback decision rule to evaluate this project; should it be accepted or rejected?

2.71 years, reject

4.00 years, reject

1.04 years, accept

0 years, accept

Reference no: EM131609793

Questions Cloud

Determine manually-trial and error and rate of return : Determine manually, by trial and error, Lucinda’s rate of return, determine Lucinda’s rate of return if she owns the house for 6 months.

Construct formal proofs for all the arguments below : Construct formal proofs for all the arguments below. Use equivalence rules, truth functional arguments, and the rules of instantiation and generalization.

Determines total compensation expense : The Black-Scholes option pricing model determines total compensation expense to be $1,900,000

Compute the weighted average number of shares : Required: Compute the weighted average number of shares to be used in computing earnings per share for 2015

Allowable payback and discounted payback statistic : the maximum allowable payback and discounted payback statistic for the project are 2 and 3 years, respectively.

What research methods were used : How can you apply the key research findings to your own life?b) What are two additional questions that you have about society based on this research?

Prepare journal entry to record the issue of bonds : The bonds with the warrants sold at 101 ($8,080,000). Prepare journal entry to record the issue of bonds

Has vogl eliminated its exposure to exchange rate risk : Vogl Co. is a U.S. firm conducting a financial plan for the next year. It has no foreign subsidiaries, but more than half of its sales are from exports.

Define when harry met sally : Explain your reasons for classifying the actors as you do. Use specific references to the film and speical attention to how these decisions impacted

User Account

All Pages