You Are Analyzing a Project and Have Prepared the Following

Multiple Choice

You are analyzing a project and have prepared the following data:
$\begin{array} { | l | l | } \hline \text { Year } & \text { Cash Flow } \\\hline 0 & £ £ 169,000 \\\hline 1 & £ 46,200 \\\hline 2 & £ 87,300 \\\hline 3 & £ 41,000 \\\hline 4 & £ 39,000 \\\hline\end{array}$
Required payback period: 2.5 years Required AAR: 7.25% Required return: 8.50% Based on the payback period of _____for this project, you should _____ the project.

A) 1.87 years; accept
B) 2.87 years; accept
C) 2.87 years; reject
D) 3.13 years; reject
E) 3.87 years; reject