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Compute the discounted payback statistic for Project D if the appropriate cost of capital is 10 percent and the maximum allow

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Answer #1
Year Cash flows Present value@10% Cumulative Cash flows
0 (12900) (12900) (12900)
1 3540 3218.18 (9681.82)
2 4560 3768.60 (5913.22)
3 1900 1427.50 (4485.72)
4 0 0 (4485.72)
5 1380 856.87 (3628.85)(Approx).

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).

=0

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