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Evaluate project by using the discounted payback decision

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Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 12 percent, and that the maximum allowable payback and discounted payback statistic for the project are 2 and 3 years, respectively.

Time               0     1    2    3    4    5    6

Cash Flow -1,030 130 470 670 670 270 670

Use the discounted payback decision rule to evaluate this project;

should it be accepted or rejected?

Reference no: EM131174691

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