Compute the discounted 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 discounted payback is three years.
A) 2.49 years, accept
B) 2.98 years, accept
C) 3.49 years, reject
D) 4.98 years, reject

Question

Compute the discounted 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 discounted payback is three years. 
A) 2.49 years, accept 
B) 2.98 years, accept 
C) 3.49 years, reject 
D) 4.98 years, reject

Quizplus · Accepted Answer

11ea8218_2911_f56c_bbd8_616cf202b861_TB1326_00 2 + 148.76/300.53 = 2.49

Compute the Discounted Payback Statistic for Project X and Recommend