Why is the discounted payback period method an improvement

Reference no: EM133633506

The Let'sMake$ Company wants to get their money back ASAP on a project. a) (5 pts) If the company's cost of capital is 10%, what is the discounted payback period on the following project:
Estimated cash flows:
Time 0 (Today) -$24,000
Year 1 $14,000
Year 2 $13,000
Year 3 $15,000

a) If the maximum allowable discounted payback is 1.5 years, should the company accept the project?

b) Why is the discounted payback period method an improvement over the payback period method?

Reference no: EM133633506

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