2.ABC Inc. is looking at investing in a 3-year project that will create cash inflows of $5,000 in the first
year, $6,000 in the second year, and $10,000 in the third year. The cost of this project is $15,000, and the
required return is 12%. Using payback period rule and a cutoff point of 2.3 years, should the company
invest in this project?
a.reject this project because the payback is approximately 2.4 years.
b.reject this project because the payback is approximately 2.2 years
c.invest in this project because the payback is approximately 2.4 years.
d.invest in this project because the payback is greater than 2.2 years.