Question: 1.Compute the Discounted Payback statistic for Project X and recommend whether the firm should accept or reject the project with the cash flows shown below

1.Compute the Discounted Payback statistic for Project X and recommend whether the firm should accept or reject the project with the cash flows shown below if the appropriate cost of capital is 10 percent and the maximum allowable discounted payback is 3 years.

Time:012345

Cash Flow:-1,000400580500400250

A.2.72 Years, Accept

B.2.42 Years, Accept

C.4.72 Years, Reject

D.3.42 Years, Reject

Compute the PI statistic for Project X and note whether the firm should accept or reject the project with the cash flows shown below if the appropriate cost of capital is 8 percent.

Time:012345

Cash Flow:-82-8201078257

A.26.08, AcceptB. 1.32, AcceptC. 8.00, RejectD. 25.12, Accept

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