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Rocket Inc. is considering a project that has the following cash flow and WACC data. WACC:...

Rocket Inc. is considering a project that has the following cash flow and WACC data. WACC: 10.00% Year 0 1 2 3 4 Cash flows -$1,000 $510 $440 $425 $405 What is the project's payback? What is the project's discounted payback? Is the project worthwhile to undertake? (Would you undertake the project?) Why?

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Answer #1

Calc:-

The project is worthwhile to undertake when the maximum payback allowable period is 3 years.

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