Compute the payback statistic for Project X 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 10 percent and the maximum allowable payback is five 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 as follows if the appropriate cost of capital is 10 percent and the maximum allowable payback is five years. 
A) 3.67 years, accept 
B) 4.67 years, accept 
C) 3.67 years, reject 
D) 4.67 years, reject

Quizplus · Accepted Answer

11ea8218_2910_6ec6_bbd8_5df97496006e_TB1326_00 3 + (50/75) = 3.67 years

Compute the Payback Statistic for Project X and Recommend Whether