MacHinery Manufacturing Company is considering a three-year project that has a c

Question

2. MacHinery Manufacturing Company is considering a three-year project that has a cost of $75,000. The project will generate after-tax cash flows of $33,100 in Year 1, $31,500 in Year 2, and $31,200 in Year 3. Assume that the appropriate discount rate is 10% and that the firm's tax rate is 40%. What is the project's discounted payback period?
3. Answer
4. 2.81 years 2.33 years 1.22 years The project never reaches payback.

2. MacHinery Manufacturing Company is considering a three-year project that has a cost of $75,000. The project will generate after-tax cash flows of $33,100 in Year 1, $31,500 in Year 2, and $31,200 in Year 3. Assume that the appropriate discount rate is 10% and that the firm's tax rate is 40%. What is the project's discounted payback period?
3. Answer
4. 2.81 years 2.33 years 1.22 years The project never reaches payback.

MacHinery Manufacturing Company is considering a three-year project that has a cost of $75,000. The project will generate after-tax cash flows of $33,100 in Year 1, $31,500 in Year 2, and $31,200 in Year 3. Assume that the appropriate discount rate is 10% and that the firm's tax rate is 40%. What is the project's discounted payback period? Answer 2.81 years 2.33 years 1.22 years The project never reaches payback. 2.81 years 2.33 years 1.22 years The project never reaches payback. 2.81 years 2.33 years 1.22 years The project never reaches payback.

Explanation / Answer

2.81 years

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