Allowable payback and discounted payback statistics

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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 8 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively. Time: 0 1 2 3 4 5 6 Cash flow –$5,000 $1,200 $2,400 $1,600 $1,600 $1,400 $1,200 Use the discounted payback decision rule to evaluate this project. (Round your answer to 2 decimal places.) Discounted payback years

Reference no: EM131057757

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