You Are Analyzing a Project and Have Prepared the Following

Multiple Choice

You are analyzing a project and have prepared the following data: $$\begin{array} { | l | l | } \hline \text { Year } & \text { Cad Flow } \\\hline 0 & -£ 169,000 \\\hline 1 & £ 46,200 \\\hline 2 & £ 87,300 \\\hline 3 & £41,000 \\\hline 4 & £ 39,000 \\\hline\end{array}$$ 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