Question: Compute the payback period statistic for Project X and recommend whether the firm should accept or reject the project with the cash flows shown in
Compute the payback period statistic for Project X and recommend whether the firm should accept or reject the project with the cash flows shown in the chart if the maximum allowable payback is four years.
Year Cash Flow
0 -$1,450
1 $250
2 $380
3 $620
4 $1,000
5 $100
Payback Period=
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