Payback period The Ball Shoe Company is considering an investment project that requires an initial...
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Payback period The Ball Shoe Company is considering an investment project that requires an initial investment of $537,000 and returns cash inflows of $89,957 per year for 10 years. The firm has a maximum acceptable payback period of 8 years. a. Determine the payback period for this project. b. Should the company accept the project? a. The payback period for this project is years. (Round to two decimal places.) b. Should the company accept the project? (Select the best answer below.) A. The company should reject the project since the after-tax cash flows occur for more years than the maximum acceptable payback. B. The company should accept the project since the payback period is less than the maximum. C. The company should reject the project since the payback period is less than the maximum. D. The company should accept the project since the after-tax cash flows occur for more years than the maximum acceptable payback. E. The company should reject the project since the payback period is less than the number of years of the after-tax cash flows
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Payback period The Ball Shoe Company is considering an investment project that requires an initial investment of $537,000 and returns cash inflows of $89,957 per year for 10 years. The firm has a maximum acceptable payback period of 8 years. a. Determine the payback period for this project. b. Should the company accept the project? a. The payback period for this project is years. (Round to two decimal places.) b. Should the company accept the project? (Select the best answer below.) A. The company should reject the project since the after-tax cash flows occur for more years than the maximum acceptable payback. B. The company should accept the project since the payback period is less than the maximum. C. The company should reject the project since the payback period is less than the maximum. D. The company should accept the project since the after-tax cash flows occur for more years than the maximum acceptable payback. E. The company should reject the project since the payback period is less than the number of years of the after-tax cash flows 