Use the discounted payback decision rule to evaluate this project; should it be accepted or rejected?
A) 1.77 years, reject
B) 1.94 years, accept
C) 2.06 years, accept
D) 3.00 years, reject

Question

Quizplus · Accepted Answer

The discounted payback period is the time it takes for the present value of cash inflows to cover the initial investment. If the discounted payback period is less than the project's lifespan, the project should be accepted. Here, 2.06 years is a reasonable period, suggesting acceptance.

Use the Discounted Payback Decision Rule to Evaluate This Project;