Compute the Payback statistic for Project A and recommend whether the firm should accept or reject the project with the cash flows shown below if the appropriate cost of capital is 8 percent and the maximum allowable payback is 4 years.
Project A
|
Time
|
0
|
1
|
2
|
3
|
4
|
5
|
|
Cash Flow
|
-$1,000
|
$350
|
$480
|
$520
|
$300
|
$100
|