Question

You are evaluating a project that will cost

$ 515, 000

​,

but is expected to produce cash flows of

$ 122 comma 000

per year for

10

​years, with the first cash flow in one year. Your cost of capital is

11.1 %

and your​ company's preferred payback period is three years or less.

a. What is the payback period of this​ project?

b. Should you take the project if you want to increase the value of the​ company?

a. What is the payback period of this​ project?

The payback period is

nothing

years.  ​(Round to two decimal​ places.)

b. Should you take the project if you want to increase the value of the​ company?  ​(Select from the​ drop-down menus.)

If you want to increase the value of the company you

▼

will

will not

take the project since the NPV is

▼

positive

negative

.

Answer 1