Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of
13 this risk class is 9 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5
years, respectively.
Times
0
1
2
3
4
5
6
Cash flow
-55,100 $1,280 $2,480 $1,680 $1,680 $1,480 $1,280
Use the PI decision rule to evaluate this project. (Do not round intermediate calculations and round your final answer to 2 decimal
places.)
PI
Should it be accepted or rejected?
rejected
accepted