Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively. Time: Cash flow: 0 -$5,000 Discounted payback 1 $1,230 2 $2,430 3 $1,630 years 4 $1,630 5 $1,430 Use the discounted payback decision rule to evaluate this project. (Round your answer to 2 dècimal places.) 6 $1,230

Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively. Time: Cash flow: 0 -$5,000 Discounted payback 1 $1,230 2 $2,430 3 $1,630 years 4 $1,630 5 $1,430 Use the discounted payback decision rule to evaluate this project. (Round your answer to 2 dècimal places.) 6 $1,230

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter11: Capital Budgeting And Risk

Section: Chapter Questions

Problem 14P

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