If a firm's maximum desired payback period is 3 years, and an investment proposal requires an initial cash outlay of $10.000 and yields the following set of annual cash flows, what is its payback period? Should the project be accepted?

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YEAR 1 FREE CASH FLOW $2,000 2345 4,000 3,000 3,000 5 9,000 YEAR 1 FREE CASH FLOW $2,000 2345 4,000 3,000 3,000 5 9,000

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To calculate the payback period you need to cumulatively sum the annual cash flows until the total e... View the full answer