J&J Enterprises is considering an investment that will cost $318,000. The investment produces no cash flows

J&J Enterprises is considering an investment that will cost $318,000. The investment produces no cash flows for the first year. In the second year, the cash inflow is $47,000. This inflow will increase to $198,000 and then $226,000 for the following two years, respectively, before ceasing permanently. The firm requires a 15.5 percent rate of return and has a required discounted payback period of three years. Should the project be accepted? Why or why not?    A.  accept; The discounted payback period is 2.18 years. B.  accept; The discounted payback period is 2.32 years. C.  accept; The discounted payback period is 2.98 years. D.  reject; The discounted payback period is 2.18 years. E.  reject; The project never pays back on a discounted basis.   The project should be rejected because it never pays back on a discounted basis.

81.

The Square Box is considering two projects, both of which have an initial cost of $35,000 and total cash inflows of $50,000. The cash inflows of project A are $5,000, $10,000, $15,000, and $20,000 over the next four years, respectively. The cash inflows for project B are $20,000, $15,000, $10,000, and $5,000 over the next four years, respectively. Which one of the following statements is correct if The Square Box requires a 13 percent rate of return and has a required discounted payback period of 3.5 years?    A.  Both projects should be accepted. B.  Both projects should be rejected. C.  Project A should be accepted and project B should be rejected. D.  Project A should be rejected and project B should be accepted. E.  You should be indifferent to accepting either or both projects.