Discounted payback decision rule to evaluate project

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Reference no: EM131913759

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 7 percent, and that the maximum allowable payback and discounted payback statistics for the project are 2.0 and 3.0 years, respectively. Time: 0 1 2 3 4 5 6 Cash flow –$4,500 $1,110 $2,310 $1,510 $1,510 $1,310 $1,110 Use the discounted payback decision rule to evaluate this project. (Round your answer to 2 decimal places.) Discounted payback years Should it be accepted or rejected? Accepted Rejected.

Reference no: EM131913759

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