Question
In: Finance
Net Cash Flows: -6,009,700 1,775,000 1,776,500 1,573,500 &
Net Cash Flows: -6,009,700 1,775,000 1,776,500 1,573,500 4,099,300
Net Cash Flows: -2,698,900 585,400 790,300 1,043,800 1,239,600
Net Cash Flows: -5,418,900 1,322,400 1,447,900 2,246,100 3,595,800
Target Rate of Return = 16.525%
What is the discounted payback period (DPP) for each of the net cash flows?
Solutions
Expert Solution
Hello
First Cashflow
| Time | Cashflows | PVF | PV | Cummulative PV |
| 0 | -$60,09,700.00 | 1.0000 | -$60,09,700.00 | -$60,09,700.00 |
| 1 | $17,75,000.00 | 0.8582 | $15,23,278.27 | -$44,86,421.73 |
| 2 | $17,76,500.00 | 0.7365 | $13,08,359.19 | -$31,78,062.55 |
| 3 | $15,73,500.00 | 0.6320 | $9,94,510.59 | -$21,83,551.95 |
| 4 | $40,99,300.00 | 0.5424 | $22,23,480.15 | $39,928.19 |
DPBP = 3 years + (21,83,551.95/22,23,480.15) = 3.98 years
Second Cashflow
| Time | Cashflows | PVF | PV | Cummulative PV |
| 0 | -$26,98,900.00 | 1.0000 | -$26,98,900.00 | -$26,98,900.00 |
| 1 | $5,85,400.00 | 0.8582 | $5,02,381.46 | -$21,96,518.54 |
| 2 | $7,90,300.00 | 0.7365 | $5,82,041.24 | -$16,14,477.29 |
| 3 | $10,43,800.00 | 0.6320 | $6,59,720.47 | -$9,54,756.83 |
| 4 | $12,39,600.00 | 0.5424 | $6,72,365.04 | -$2,82,391.79 |
DPBP = N/A
Third Cashflow
| Time | Cashflows | PVF | PV | Cummulative PV |
| 0 | -$54,18,900.00 | 1.0000 | -$54,18,900.00 | -$54,18,900.00 |
| 1 | $13,22,400.00 | 0.8582 | $11,34,863.76 | -$42,84,036.24 |
| 2 | $14,47,900.00 | 0.7365 | $10,66,351.40 | -$32,17,684.83 |
| 3 | $22,46,100.00 | 0.6320 | $14,19,618.84 | -$17,98,066.00 |
| 4 | $35,95,800.00 | 0.5424 | $19,50,379.31 | $1,52,313.31 |
DPBP = 3 years + (17,98,066.00/19,50,379.31) = 3.92 years
Thanks!
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jeff jeffy answered 2 years agoRelated Solutions
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