An investment project has annual cash inflows of $3,300, $4,200, $5,400, and $4,600, and a discount rate of 15 percent.

a.	What is the discounted payback period for these cash flows if the initial cost is $6,000? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
b.	What is the discounted payback period for these cash flows if the initial cost is $8,100? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
c.	What is the discounted payback period for these cash flows if the initial cost is $11,100? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Expert Solution

1.
=1+(6000-3300/1.15)/(4200/1.15^2)
=1.986

2.
=2+(8100-3300/1.15-4200/1.15^2)/(5400/1.15^3)
=2.579

3.
=3+(11100-3300/1.15-4200/1.15^2-5400/1.15^3)/(4600/1.15^4)
=3.572

jeff jeffy answered 2 years ago

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