Ginny Trueblood Is Considering an Investment Which Will Cost Her

Multiple Choice

Ginny Trueblood is considering an investment which will cost her £120,000.The investment produces no cash flows for the first year.In the second year the cash inflow is £35,000.This inflow
Will increase to £55,000 and then £75,000 for the following two years before ceasing permanently.
Ginny requires a 10% rate of return and has a required discounted payback period of three years.
Ginny should _____ this project because the discounted payback period is _____.

A) accept; 2.03 years
B) accept; 2.97 years
C) accept; 3.97 years
D) reject; 3.03 years
E) reject; 3.97 years