Question: Compute the discounted payback statistic for Project X and recommend whether the firm should accept or reject the project with the cash flows shown as

Compute the discounted payback statistic for Project X and recommend whether the firm should accept or reject the project with the cash flows shown as follows id the appropriate cost of capital is 10 percent and the maximum allowable discounted payback is three years.

Time 0 1 2 3 4 5

Cash Flows -1,000 500 400 400 300 150

Multiple Choice

A. 2.98 years, accept

B. 4.98 years, reject

C. 2.49 years, accept

D. 3.49 years, reject

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