You are considering an investment with the following cash flows. Your required return is 8%,...
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You are considering an investment with the following cash flows. Your required return is 8%, you require a payback of 3 years and a discounted payback of 4 years. If your objective is to maximize your wealth, should you take this investment? Year 0 1 2 3 4 5 Cash Flow $50,000 $20,000 $20,000 $20,000 $20,000 $50,000
Yes, because the payback is 2.5 years.
Yes, because the discounted payback is less than 4 years.
Yes, because both the payback and the discounted payback are less than 2 years.
No, because the NPV is negative.
No, because the project cash flows are not conventional.
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