Find the payback statistic for project y

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Problem 1: Compute the payback statistic for Project Y and recommend whether the firm should accept or reject the project with the cash flows shown as follows if the appropriate cost of capital is 11 percent and the maximum allowable payback is one year:

Time :           0         1           2           3         4           5
Cash flow:   -100      75         100        300       75        200

Option 1: 2.25 years; accept
Option 2: 1.25 years, accept
Option 3: 1.33 years; accept
Option 4: 1.25 years; reject

Reference no: EM132755243

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