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An investment project costs $18,000 and has annual cash flows of $3,600 for six years. a. What is the discounted payback...

An investment project costs $18,000 and has annual cash flows of $3,600 for six years.

a. What is the discounted payback period if the discount rate is zero percent?

b. What is the discounted payback period if the discount rate is 5 percent?

c. What is the discounted payback period if the discount rate is 19 percent?

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Answer #1

a.

Year Cash flow QUAWNLO P.V.Factor (18,000.00) 3,600.00 3,600.00 3,600.00 3,600.00 3,600.00 3,600.00 Discounted C.F Cumulative

b.

Year Cash flow OWN P.V.Factor Discounted C.F Cumulative cash flows (18,000.00) (18,000) (18,000) 3,600.00 0.95238095 3,429 (1

c.

Never, the amount will not be recovered at 19%

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