Compute the payback statistic for Project X and recommend whether the firm should accept or reject the project with the cash flows shown as follows if the appropriate cost of capital is 9 percent and the maximum allowable payback is four years.

Time:	0	1	2	3	4	5
Cash flow:	1,000	75	100	100	0	2,000

Multiple Choice

• 3.78 years, reject

• 3.4375 years, accept

• 4.4375 years, reject

• 4.78 years, accept