Homework Answers
Ans a) 2.14 years
| Year | Project Cash Flows (i) | DF@ 10% (ii) | PV of Project A ( (i) * (ii) ) | Cumulative Cash Flow |
| 0 | -925 | 1 | (925.00) | (925.00) |
| 1 | 525 | 0.909 | 477.27 | (447.73) |
| 2 | 485 | 0.826 | 400.83 | (46.90) |
| 3 | 445 | 0.751 | 334.34 | 287.43 |
| 4 | 405 | 0.683 | 276.62 | 564.05 |
| NPV | 564.05 | |||
| Discounted Payback Period = | 2 years + 46.90 / 334.34 | |||
| 2.14 years | ||||
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