Answer:
Reject; The project never pays back on a discounted basis
Explanation:
Discounted pay back period calculates the amount of the time it takes to recover the amount invested in a project to be recovered from the cumulative discounted cash flow.
$47,000 / 1.152^2 = $35,415.46
$198,000 / 1.152^3 = $129,511.33
$226,000 / 1.152^4 = $128,321.23
The amount invested is $-309,000
The amount recovered in year 2 = $309,000 + $35,415.46 = $-273,584.54
The amount recovered in year 3 = $-273,584.54 + $129,511.33 = $-144,073.21
The amount recovered in year 4 = $-144,073.21 + $128,321.23 = $-15,751.98
The amount invested is never recovered
The project shouldn't be accepted
I hope my answer helps you
