Use the pi decision rule to evaluate this project

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Reference no: EM132007103

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 -920 200 440 640 640 240 640

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

Reference no: EM132007103

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