Payback decision rule to evaluate project

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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 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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