Firm has maximum acceptable payback period

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Reference no: EM131304610

Jordan Enterprises is considering a capital expenditure that requires an initial investment of $ 63,000 and returns after tax cash inflows $13,246 per year for 10 years. The firm has a maximum acceptable payback period of 8 years

a) The payback period for this project is ____years Round to two decimal places

b) Should the company accept the? project? ?(Select the best answer? below.)

1 The company should accept the project since the payback period is less than the maximum.

2 The company should accept the project since the? after-tax cash flows occur for more years than the maximum acceptable payback.

3 The company should reject the project since the payback period is less than the number of years of the? after-tax cash flows.

4 The company should reject the project since the? after-tax cash flows occur for more years than the maximum acceptable payback.

5 The company should reject the project since the payback period is less than the maximum.

Reference no: EM131304610

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