Hobart Corporation evaluates capital projects using a variety of performance screens; including a hurdle rate of 16%, payback period of 3 years or less, and an accounting rate of return of 20% or more. Management is completing review of a project on the basis of the following projections. Capital investment P200,000 Annual cash flows P 74,000 Straight-line depreciation 5 years Terminal value P20,000 The projected internal rate of return (IRR) is 20%. Which one of the following alternatives reflects the appropriate conclusions for the indicated evaluative measures?Group of answer choices IRR − Accept; Payback − Accept. IRR − Accept; Payback − Reject. IRR − Reject; Payback − Reject. IRR − Reject; Payback − Accept.

Hobart Corporation evaluates capital projects using a variety of performance screens; including a hurdle rate of 16%, payback period of 3 years or less, and an accounting rate of return of 20% or...

Hobart Corporation evaluates capital projects using a variety of performance screens; including a hurdle rate of 16%, payback period of 3 years or less, and an accounting rate of return of 20% or more. Management is completing review of a project on the basis of the following projections.

Capital investment	P200,000
Annual cash flows	P 74,000
Straight-line depreciation	5 years
Terminal value	P20,000

The projected internal rate of return (IRR) is 20%. Which one of the following alternatives reflects the appropriate conclusions for the indicated evaluative measures?

Group of answer choices

IRR − Accept; Payback − Accept.

IRR − Accept; Payback − Reject.

IRR − Reject; Payback − Reject.

IRR − Reject; Payback − Accept.

Jun 10, 2022

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Hobart Corporation evaluates capital projects using a variety of performance screens; including a hurdle rate of 16%, payback period of 3 years or less, and an accounting rate of return of 20% or...

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