Compute the Payback statistic for Project X and recommend whether the firm should accept or reject the project with the cash flows shown below if the appropriate cost of capital is 10 percent and the maximum allowable payback is 5 years.
A) 3.67 years, accept
B) 4.67 years, accept
C) 3.67 years, reject
D) 4.67 years, reject

Question

Compute the Payback statistic for Project X and recommend whether the firm should accept or reject the project with the cash flows shown below if the appropriate cost of capital is 10 percent and the maximum allowable payback is 5 years. 
A) 3.67 years, accept 
B) 4.67 years, accept 
C) 3.67 years, reject 
D) 4.67 years, reject

Quizplus · Accepted Answer

The Answer is A

Compute the Payback Statistic for Project X and Recommend Whether