Question: 11
(Choose 1 answer)
Carmen Electronics bought new machinery for $5 million. This is expected to result in additional cash flows of $1.2
million over the next seven years. The firm's cost of capital is 12 percent. What is the discounted payback period
for this project? If the firm's acceptance period is five years, will this project be accepted? (Do not round
intermediate computations. Round your answer to one decimal place.)
A. 5.4 years; no
B. 6.1 years; no
C. 6.1 years: yes
D. 4.2 years: yes
