Considering four-year project that has an initial outlay

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Reference no: EM13911002

Acme, Inc. is considering a four-year project that has an initial outlay or cost of $100,000. The respective future cash inflows from its project for years 1, 2, 3 and 4 are: $50,000, $40,000, $30,000 and $20,000. Will it accept the project if its payback period is 31 months?

Yes, because it pays back in 25 months.

No, because it pays back in over 31 months.

No, because it pays back in over 35 months.

Yes, because it pays back in 28 months.

Reference no: EM13911002

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