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Discounted payback period

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Reference no: EM131041492

A firm wants to get their money back ASAP on a project.

a) If the company's cost of capital is 10%, what is the discounted payback period on the following project:

Estimated cash flows:

Time 0 (Today) -$24,000

Year 1 $14,000

Year 2 $13,000

Year 3 $15,000

b) If the maximum allowable discounted payback is 1.5 years, should the company accept the project?

Reference no: EM131041492

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