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A Department manager is ready to invest money into an investment project that pays back...

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Finance

A Department manager is ready to invest money into an investment project that pays back within 3 years. The table below shows estimated cash flows from a new project:

Cash flow ($)
Year 0 -3,100
In 1 year 1,500
In 2 years 1,200
In 3 years 800
In 4 years 900

(a) The payback period for this project is [ Select ] ["2.22", "2.33", "2.5", "3.33", "3.5"] years.

(b) Based on the Payback Period rule to investment valuation, this project should be [ Select ] ["accepted", "rejected", "neither accepted nor rejected"] .

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