Problem:
Payback period Jordan Enterprises is considering a capital expenditure that requires an initial investment of $42,000 and returns after-tax cash inflows of $7,000 per year for 10 years. The firm has a maximum acceptable payback period of 8 years.
Required:
Question 1: Determine the payback period for this project.
Question 2: Should the company accept the project? Why or why not? Please explain in detail and also provide step by step solution.