Question: Cranium Inc. uses the payback period method to evaluate projects. It is considering a 4-year project that has an initial investment of $100,000. The respective

Cranium Inc. uses the payback period method to evaluate projects. It is considering a 4-year project that has an initial investment of $100,000. The respective future cash inflows from this project for years 1, 2, 3 and 4 are as follows: $50,000, $40,000, $30,000 in $20,000 respectively. Should the firm accept this project if its internal hurdle rate has been set at 26 months? a) No, because it pays back in 28 months b) Yes, because it pays back in 23 months c) No, because it pays back in over 31 months d) Yes, because it pays back in 25 months

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