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ABC Inc. is looking at investing in a 3-year project that will create cash inflows of...

ABC Inc. is looking at investing in a 3-year project that will create cash inflows of $7,000 in the first year, $8,000 in the second year, and $9,000 in the third year. The cost of this project is $18,000, and the required return is 12%. Using the discounted payback period rule and a cutoff point of 2.5 years, should the company invest in this project?

a. Yes, ABC should invest in this project because the discounted payback is approximately 2.6 years

b. No, ABC should reject this project because the discounted payback is approximately 2.8 years

c. No, ABC should reject this project because the discounted payback is approximately 2.3 years

d.Yes, ABC should invest this project because the discounted payback is approximately 2.8 year

e. Yes, ABC should invest in this project because the discounted payback is greater than 3 years

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