Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 12 percent, and that the maximum allowable payback and discounted payback statistics for your company are 2.5 and 3.0 years, respectively. Time: Cash flow: 0 1 2 3 -$227,000 $65,000 $83,200 $140,200 4 $121,200 5 $80,400 Use the payback decision rule to evaluate this project. Note: Round your answer to 2 decimal places. Payback years

Engineering Fundamentals: An Introduction to Engineering (MindTap Course List)
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Author:Saeed Moaveni
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Chapter20: Engineering Economics
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Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects
of this risk class is 12 percent, and that the maximum allowable payback and discounted payback statistics for your company are
2.5 and 3.0 years, respectively.
Time:
Cash flow:
0
1
2
3
-$227,000
$65,000
$83,200
$140,200
4
$121,200
5
$80,400
Use the payback decision rule to evaluate this project.
Note: Round your answer to 2 decimal places.
Payback
years
Transcribed Image Text:Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 12 percent, and that the maximum allowable payback and discounted payback statistics for your company are 2.5 and 3.0 years, respectively. Time: Cash flow: 0 1 2 3 -$227,000 $65,000 $83,200 $140,200 4 $121,200 5 $80,400 Use the payback decision rule to evaluate this project. Note: Round your answer to 2 decimal places. Payback years
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