Use the payback decision rule to evaluate project

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Reference no: EM132034782

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 13 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 -1,020 120 480 680 680 280 680

Use the payback decision rule to evaluate this project; should it be accepted or rejected?

Reference no: EM132034782

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