Calculate payback and use payback decision rule to evaluate

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Reference no: EM131989665

Suppose your firm is considering investing in a project with the cash flows shown as follows, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistic for the project are three and three and a half years, respectively.

Time 0 1 2 3 4 5

Cash Flow -100,000 30,000 45,000 55,000 30,000 10,000

Calculate the payback and use the payback decision rule to evaluate this project; should it be accepted or rejected? Show your calculations

Reference no: EM131989665

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