Ginny is considering an investment costing $55,000 that has cash flows of $35,000 in Year 2,$36,000 in Year 3,and −$5,000 in Year 4.She requires a rate of return of 8 percent and has a required discounted payback period of three years.Should this project be accepted? Why?
A)Yes; The project pays back on a discounted basis within the assigned time period and also produces a positive NPV.
B)Yes; The discounted payback requirement is met and other methods of analysis are less desirable.
C)No; Although the project earns more than 8 percent,there is no situation where the project can pay back on a discounted basis within three years.
D)No; The discounted payback period is too short.
E)No; The NPV indicates rejection as does DPB when all cash flows are considered.

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The Answer of Ginny is considering an investment costing $55,000 that has cash flows of $35,000 in Year 2,$36,000 in Year 3,and −$5,000 in Year 4.She requires a rate of return of 8 percent and has a required discounted payback period of three years.Should this project be accepted? Why?
A)Yes; The project pays back on a discounted basis within the assigned time period and also produces a positive NPV.
B)Yes; The discounted payback requirement is met and other methods of analysis are less desirable.
C)No; Although the project earns more than 8 percent,there is no situation where the project can pay back on a discounted basis within three years.
D)No; The discounted payback period is too short.
E)No; The NPV indicates rejection as does DPB when all cash flows are considered.

Ginny Is Considering an Investment Costing $55,000 That Has Cash