MC Qu. 9 Compute the Discounted Payback statistic for... Compute the Discounted

Question

MC Qu. 9 Compute the Discounted Payback statistic for...

Compute the Discounted Payback statistic for Project DD and recommend whether the firm should accept or reject the project with the cash flows shown below if the appropriate cost of capital is 11 percent and the maximum allowable discounted payback is 4 y

The project has a payback of 3.79 years; the project should be accepted. The project has a payback of 3.98 years; the project should be accepted. The project has a payback of 4.36 years; the project should be rejected. The project will never achieve a discounted payback and should be rejected. Compute the Discounted Payback statistic for Project DD and recommend whether the firm should accept or reject the project with the cash flows shown below if the appropriate cost of capital is 11 percent and the maxi mu m allowable discounted payback is 4 y

Explanation / Answer

The project has a payback of 3.79 years; the project should be accepted.

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