Calculate the payback period and do you accept the project

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Reference no: EM133616000

Problem

For the project below, you have the following cash flows. The maximum payback period is 2 years and the cost of capital is 9%.

Project	Investment	CF 1	CF 2	CF 3	CF 4
Ace	$-950,000	$330,000	$400,000	$450,000	$200,000

Question A. Calculate the payback period. Do you accept the project?
Question B. Calculate the profitability index. Do you accept the project?

Reference no: EM133616000

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