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Suppose your firm is considering investing in Project W with thecash flows shown in the table, that the required rate of return onprojects of this risk class is 10 percent, and that the maximumallowable payback and discounted payback statistics for the projectare 3.5 and 4.5 years, respectively. Use the PI decision toevaluate this project; should it be accepted or rejected?A. PI = 1.04; reject the projectB. PI = 1.04; accept the projectC. PI = 0.04; reject the projectD. PI = 0.96; reject the projectE. PI = 0.96; accept the projectProject W Time Cash Flow 0 – $85,000 1 $12,000 2 $11,000 3$13,000 4 $21,000 5 $31,000 6 $32,000
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