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Question 2 (1 point) What is the discounted payback for a project with the following cash flows, at 4.0%? Cost 0 ($10,000) Re
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Answer #1
Year Returns Present value@4% Cumulative Returns
0 (10,000) (10,000) (10,000)
1 4500 4326.92 (5673.08)
2 3250 3004.81 (2668.27)
3 3000 2666.99 (1.28)
4 1000 854.80 853.52(Approx).

Hence discounted Payback period=Last period with a negative cumulative cash flow+(Absolute value of cumulative cash flows at that period/Cash flow after that period).

=3+(1.28/854.80)

=3.0 (Approx).

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