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Suppose your firm is considering investing in a project with the cash flows shown below, that...

Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 13 percent, and that the maximum allowable payback and discounted payback statistic for the project are 2 and 3 years, respectively.

  Time 0 1 2 3 4 5 6
  Cash Flow -970 170 430 630 630 230

630

Use the NPV decision rule to evaluate this project; should it be accepted or rejected?

a. $767.64, accept

b. $-440.67, reject

c. $1,737.64, accept

d.$679.33, accept

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Answer #1

Answer:- Option (a) $767.64, accept

Explanation:-

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