Question

(Discounted paybeck period) Gio's Restaurants is considering a project with the following expected cash fows: mi the projecfs appropriate discount rate is 9 percent, what is the project's discounted payback period? The project's discounted paybeck period is years. (Round to two decimal places) Data Table PROJECT YEAR CASH FLOW 0 -$180million 80million 1 75milion 3 95miion 90miion 4 (Click on the on loaed on he top right comer of the date fable above in order o copy contents into a spreadsheet) Prints Done

Answer 1

Discounted Payback period is the period in which initial investment is recovred after considering the time value of money.

Year	Opening Bal	CF	PVF @9%	Disc CF	Closing Bal
1	$ 18,00,00,000.00	$ 8,00,00,000.00	0.9174	$ 7,33,94,495.41	$ 10,66,05,504.59
2	$ 10,66,05,504.59	$ 7,50,00,000.00	0.8417	$ 6,31,25,999.49	$   4,34,79,505.09
3	$   4,34,79,505.09	$ 9,50,00,000.00	0.7722	$ 7,33,57,430.61	$ -2,98,77,925.51
4	$ -2,98,77,925.51	$ 9,00,00,000.00	0.7084	$ 6,37,58,269.00	$ -9,36,36,194.51

Disc PBP = Year in which least +ve CB + [ CB in that Year / Disc CF in Next year ]

= 2 + [ 43479505.09 / 73357430.61 ]

= 2 + 0.59

= 2.59 Years.

Discounted Payback period is 2.59 Years.