Question: suppose your firm is considering investing in a project with...
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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 7 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:  –$4,800  $1,210  $2,410  $1,610  $1,610  $1,410  $1,210 
Use the PI decision rule to evaluate this project. (Do not round intermediate calculations and round your final answer to 2 decimal places.)
Should it be accepted or rejected?

accepted

rejected