A. Compute the payback period statistic for Project X and recommend whether the firm should accept or reject the project with the cash flows shown in the chart if the maximum allowable payback is four years.
Cumulative Cash Flow
As shown above, the cash flow will switch from negative to positive between the third and fourth year. Using the formula PB = 3 + 200/1000 = 3.2 years. This project should be accepted.
A. If the discounted payback period were computed, identify if it would be less than, equal to, or greater than the non-discounted payback period.
Please assume any discount rate.
PLEASE HELP WITH THIS PART.