Question

Compute the discounted payback statistic for Project D if the appropriate cost of capital is 12 percent and the maximum allowable discounted payback is four years. (Do not round intermediate calculations and round your final answer to 2 decimal places. If the project does not pay back, then enter a "0" (zero).)

Project D
Time:	0	1	2	3	4	5
Cash flow:	–$11,000	$3,350	$4,180	$1,520	$300	$1,000

Discounted payback period _______ years

Should the project be accepted or rejected?

Answer 1

	Project D
i	Time:	-	1	2	3	4	5
ii	Cash flow:	(11,000)	3,350	4,180	1,520	300	1,000
iii	PVIF @ 12%	1.000000	0.892857	0.797194	0.711780	0.635518	0.567427
iv=ii*iii	Present value	(11,000.00)	2,991.07	3,332.27	1,081.91	190.66	567.43	(2,836.67)
	As NPV is negative therefore project will not have discounted payback period.
	Ans = 0 Year
	Should the project be accepted or rejected? - Project should be REJECTED