Year | Cash flow | Present value@11% | Cumulative Cash flow |
0 | (35000) | (35000) | (35000) |
1 | 8000 | 7207.21 | (27792.79) |
2 | 8000 | 6492.98 | (21299.81) |
3 | 8000 | 5849.53 | (15450.28) |
4 | 8000 | 5269.85 | (10180.43) |
5 | 8000 | 4747.61 | (5432.82) |
6 | 8000 | 4277.13 | (1155.69) |
7 | 8000 | 3853.27 | 2697.58 |
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).
=6+(1155.69/3853.27)
=6.30 years(Approx).
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