Payback decision rule to evaluate project

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Reference no: EM131916756

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 9 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively.

Time: 0 1 2 3 4 5 6

Cash flow –$5,200 $1,250 $2,450 $1,650 $1,570 $1,450 $1,250

Use the payback decision rule to evaluate this project. (Round your answer to 2 decimal places.)

Payback

years

Reference no: EM131916756

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