Use the payback decision rule to evaluate this project

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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 2.5 and 3.5 years, respectively.

Time: 0 1 2 3 4 5 6

Cash flow –$4,800 $1,140 $2,340 $1,540 $1,540 $1,340 $1,140

Use the payback decision rule to evaluate this project. (Round your answer to 2 decimal places.) Payback years

Reference no: EM131968111

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