1. Business
  2. Finance
  3. suppose your firm is considering investing in a project with...

Question: suppose your firm is considering investing in a project with...

Question details

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.)

PI _______

Should it be accepted or rejected?

  • accepted

  • rejected

Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution