Compute the Payback Statistic for Project Y and Recommend Whether

question 20

Multiple Choice

Compute the payback statistic for Project Y and recommend whether the firm should accept or reject the project with the cash flows shown as follows if the appropriate cost of capital is 11 percent and the maximum allowable payback is one year.
$$\begin{array}{l}\begin{array} {| l | l | l | l | l | l | l |}\hline\text {Time: }&0&1&2&3&4&5\\\hline\text {Cash flow:}&-100&75&100&300&75&200\\\hline\end{array}\end{array}$$

• A) 1.25 years, reject
• B) 1.25 years, accept
• C) 1.33 years, accept
• D) 2.25 years, accept

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Definitions:

Peristalsis

The series of wave-like muscle contractions that moves food through the digestive tract.

Hydrolysis

Hydrolysis is a chemical reaction in which water is used to break down the bonds of a compound, often splitting molecules into two or more smaller substances.

Alkaline Mucus

A type of mucus that has a higher pH and helps protect mucosal linings from acidic conditions.

Epithelial Cells

Specialized cells that line the surfaces of organs, vessels, and cavities in the body, serving as a protective barrier and involved in absorption, secretion, and sensation.