An investment project has annual cash inflows of $3,800, $4,700, $5,900, and $5,

Question

An investment project has annual cash inflows of $3,800, $4,700, $5,900, and $5,100, and a discount rate of 14 percent.

What is the discounted payback period for these cash flows if the initial cost is $6,500? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

What is the discounted payback period for these cash flows if the initial cost is $8,600? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

What is the discounted payback period for these cash flows if the initial cost is $11,600? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Explanation / Answer

What is the discounted payback period for these cash flows if the initial cost is $6,500?

1+[(6500-3333.33)/3616.4974= 1.88 years

What is the discounted payback period for these cash flows if the initial cost is $8,600?

2+[(8600-3333.33-3616.497)/3982.3319= 2.41 years

What is the discounted payback period for these cash flows if the initial cost is $11,600?

3+[(11600-3333.33-3616.497-3982.3319)]/3019.6094= 3.22 years

year cash flow discounted cashflow(14%) 1 3800 3333.3333 2 4700 3616.4974 3 5900 3982.3319 4 5100 3019.6094

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