Assume we will accept the project if it pays back on a discounted basis in...

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Finance

  1. Assume we will accept the project if it pays back on a discounted basis in 3 years. Compute the PV for each cash flow and determine the payback period using discounted cash flows.

Initial Cost $200,000

  1. Year 1: CF 50,000
  2. Year 2: CF 100,000
  3. Year 3: CF 50,000
  4. Year 4: CF 200,000

Do we accept or reject the project?

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