Question
In: Finance
Compute the payback statistic for Project B if the appropriate cost of capital is 12 percent...
Compute the payback statistic for Project B if the appropriate cost of capital is 12 percent and the maximum allowable payback period is three years. (If the project never pays back, then enter a "0" (zero).)
| Project B | ||||||
| Time: | 0 | 1 | 2 | 3 | 4 | 5 |
| Cash flow: | –$11,600 | $3,410 | $4,300 | $1,640 | $0 | $1,120 |
Solutions
Expert Solution
payback period is the period in which initial investment is recovered.
| Year | Opening Bal | CF | Closing Bal |
| 1 | $ 11,600.00 | $ 3,410.00 | $ 8,190.00 |
| 2 | $ 8,190.00 | $ 4,300.00 | $ 3,890.00 |
| 3 | $ 3,890.00 | $ 1,640.00 | $ 2,250.00 |
| 4 | $ 2,250.00 | $ - | $ 2,250.00 |
| 5 | $ 2,250.00 | $ 1,120.00 | $ 1,130.00 |
Even after 5 years completion, Project is unable to recover initial investment.
Hence Project is Rejected.
jeff jeffy answered 2 months agoRelated Solutions
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Project A
Time:
0
1
2
3
4
5
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$590
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Compute the discounted payback statistic for Project D if the
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Project D
Time:
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1
2
3
4
5
Cash flow:
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Compute the discounted payback statistic for Project D if the appropriate cost of capital is 12...
Compute the discounted payback statistic for Project D if the
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intermediate calculations and round your final answer to 2 decimal
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Time:
0
1
2
3
4
5
Cash flow:
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$3,350
$4,180
$1,520
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$1,000
Discounted payback period _______ years
Should the project be accepted or...
Compute the discounted payback statistic for Project D if the appropriate cost of capital is 12...
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:
–$12,200
$3,470
$4,420
$1,760
$0
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Compute the NPV statistic for Project Y if the appropriate cost of capital is 12 percent....
Compute the NPV statistic for Project Y if the appropriate cost
of capital is 12 percent. (Negative amount should be
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intermediate calculations and round your final answer to 2 decimal
places.)
Project Y
Time:
0
1
2
3
4
Cash flow:
–$9,200
$3,590
$4,420
$1,760
$540
NPV:
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Compute the discounted payback statistic for Project C if the
appropriate cost of capital is 8 percent and the maximum allowable
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Time:
0
1
2
3
4
5
Cash flow:
–$1,000
$480
$480
$520
$300
$100
Calculate discounted payback period in years
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(Do not round intermediate calculations
and round your final answer to 2 decimal places.)
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Time:
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1
2
3
4
5
Cash flow:
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appropriate cost of capital is 8 percent and the maximum allowable
discounted payback period is three years. (Do not round
intermediate calculations and round your final answer to 2 decimal
places.) Project C Time: 0 1 2 3 4 5 Cash flow: –$2,200 $960 $840
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