Question

What is the discounted payback period for the investment project that has the following cash flows,...

What is the discounted payback period for the investment project that has the following cash flows, if the discount rate is 14 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Year Cash Flows
0 -4,379
1 1,963
2 2,710
3 2,546
4 1,962
0 0
Add a comment Improve this question Transcribed image text
Answer #1
Year Cash flows Present value@14% Cumulative Cash flows
0 (4,379) (4,379) (4,379)
1 1,963 1721.93 (2657.07)
2 2,710 2085.26 (571.81)
3 2,546 1718.48 1146.67
4 1,962 1161.66 2308.33

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).

=2+(571.81/1718.48)

=2.33 years(Approx).

Add a comment
Know the answer?
Add Answer to:
What is the discounted payback period for the investment project that has the following cash flows,...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • What is the discounted payback period for the investment project that has the following cash flows,...

    What is the discounted payback period for the investment project that has the following cash flows, if the discount rate is 14 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Year Cash Flows 0 -12,720 1 4,473 2 5,037 3 5,606 4 6,848

  • What is the discounted payback period for the investment project that has the following cash flows,...

    What is the discounted payback period for the investment project that has the following cash flows, if the discount rate is 14 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Year Cash Flows 0 -14295 1 4309 2 5037 3 5666 4 6494

  • An investment project costs $10,000 and has annual cash flows of $2,890 for six years. a....

    An investment project costs $10,000 and has annual cash flows of $2,890 for six years. a. What is the discounted payback period if the discount rate is zero percent? (Enter O if the project never pays back. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the discounted payback period if the discount rate is 4 percent? (Enter O if the project never pays back. Do not round intermediate calculations and...

  • An investment project has annual cash inflows of $5,000, $3,300, $4,500, and $3,700, for the next...

    An investment project has annual cash inflows of $5,000, $3,300, $4,500, and $3,700, for the next four years, respectively. The discount rate is 14 percent. a. What is the discounted payback period for these cash flows if the initial cost is $5,100? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the discounted payback period for these cash flows if the initial cost is $7,200? (Do not round intermediate calculations and...

  • An investment project has annual cash inflows of $4,000, $4,900, $6,100, and $5,300, for the next...

    An investment project has annual cash inflows of $4,000, $4,900, $6,100, and $5,300, for the next four years, respectively. The discount rate is 13 percent. What is the discounted payback period for these cash flows if the initial cost is $6,700? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Discounted payback period years What is the discounted payback period for these cash flows if the initial cost is $8,800? (Do not round intermediate...

  • An investment project has annual cash inflows of $4,900, $3,400, $4,600, and $3,800, for the next...

    An investment project has annual cash inflows of $4,900, $3,400, $4,600, and $3,800, for the next four years, respectively. The discount rate is 13 percent. intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Discounted payback period years What is the discounted payback period for these cash flows if the initial cost is $7,300? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Discounted payback period years What is the discounted...

  • An investment project costs $10,000 and has annual cash flows of $2,960 for six years. What...

    An investment project costs $10,000 and has annual cash flows of $2,960 for six years. What is the discounted payback period if the discount rate is zero percent? (Enter 0 if the project never pays back. Round your answer to 2 decimal places, e.g., 32.16.) Discounted payback period years What is the discounted payback period if the discount rate is 5 percent? (Enter 0 if the project never pays back. Round your answer to 2 decimal places, e.g., 32.16.) Discounted...

  • 1. value: 10.00 points An investment project costs $10,000 and has annual cash flows of $2,980...

    1. value: 10.00 points An investment project costs $10,000 and has annual cash flows of $2,980 for six years. What is the discounted payback period if the discount rate is zero percent? (Enter 0 if the project never pays back. Round your answer to 2 decimal places, e.g., 32.16.) Discounted payback period years What is the discounted payback period if the discount rate is 4 percent? (Enter 0 if the project never pays back. Round your answer to 2 decimal...

  • 2. 10.00 points An investment project costs $10,000 and has annual cash flows of $2,800 for...

    2. 10.00 points An investment project costs $10,000 and has annual cash flows of $2,800 for six years. What is the discounted payback period if the discount rate is zero percent? (Enter 0 if the project never pays back. Round your answer to 2 decimal places, e.g. 32.16.) Discounted payback period years What is the discounted payback period if the discount rate is 4 percent? (Enter 0 if the project never pays back. Round your answer to 2 decimal places,...

  • Bronco, Inc., imposes a payback cutoff of three years for its international investment projects. Year 0...

    Bronco, Inc., imposes a payback cutoff of three years for its international investment projects. Year 0 1 Cash Flow (A) Cash Flow (B) -$54,000 $ 64,000 20,000 12,000 22,000 15,000 18,000 20,000 5,000 224,000 NM What is the payback period for both projects? (Round your answers to 2 decimal places, e.g., 32.16.) Project A Project B years years Which project should the company accept? Project A O Project B An investment project has annual cash inflows of $5,000, $3,300, $4,500,...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
Active Questions
ADVERTISEMENT