Compute the discounted payback statistic for Project Y and recommend whether the firm should accept or reject the project with the cash flows shown as follows if the appropriate cost of capital is 12 percent and the maximum allowable discounted payback is three years.
A) 3.45 years, reject
B) 3.86 years, reject
C) 3.45 years, accept
D) 3.86 years, accept

Question

Compute the discounted payback statistic for Project Y and recommend whether the firm should accept or reject the project with the cash flows shown as follows if the appropriate cost of capital is 12 percent and the maximum allowable discounted payback is three years. 
A) 3.45 years, reject 
B) 3.86 years, reject 
C) 3.45 years, accept 
D) 3.86 years, accept

Quizplus · Accepted Answer

11ea8218_2912_6a9e_bbd8_451c29acab68_TB1326_00 3 + 823.84/953.28 = 3.86

Compute the Discounted Payback Statistic for Project Y and Recommend