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Acme Inc is considering a fouryear project that has initial outlay or cost of $100000 The respective cash inflows for years 1 2 3 and 4 are

Acme, Inc. is considering a four-year project that has initial outlay or cost of $100,000. The respective cash inflows for years 1, 2, 3 and 4 are: $50,000, $40,000, $30,000 and $20,000. Acme uses the discounted payback period method, and has a discount rate of 11.50%. Will Acme accept the project if it's payback period is 37 months?

  A.

Yes, because it pays back in less than 37 months.

  B.

No, because it pays back in over 37 months.

  C.

No, because it pays back in over 38 months.

  D.

No, because it pays back in over 40 months.

 

Aug 12 2020 View more View Less

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