Question

In: Finance

Compute the discounted payback statistic for Project C if the appropriate cost of capital is 8...

Compute the discounted payback statistic for Project C if the 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: –$1,300 $600 $570 $610 $360 $160

Solutions

Expert Solution

Project C Discount rate= 0.08
Year Cash flow stream Cumulative cash flow Discounting factor Discounted CF Cumulative cash flow Cumulative discounted CF
0 -1300 -1300 1 -1300 -1300 -1300
1 600 -700 1.08 555.5556 -700 -744.444
2 570 -130 1.1664 488.6831 -130 -255.761
3 610 480 1.259712 484.2377 480 228.4764
4 360 840 1.360489 264.6107 840 493.0871
5 160 1000 1.469328 108.8933 1000 601.9804
Discounted payback period is the time by which discounted cashflow cover the intial investment outlay
this is happening between year 2 and 3
therefore by interpolation payback period = 2 + (0-(-255.76))/(228.48-(-255.76))
2.53 Years
Where
Discounting factor =(1 + discount rate)^(corresponding year)
Discounted Cashflow=Cash flow stream/discounting factor

jeff jeffy answered 4 months ago
Next > < Previous

Related Solutions

Compute the discounted payback statistic for Project C if the appropriate cost of capital is 8...
Compute the discounted payback statistic for Project C if the appropriate cost of capital is 8 percent and the maximum allowable discounted payback period is three years. Time: 0 1 2 3 4 5 Cash flow: –$1,000 $480 $480 $520 $300 $100 Calculate discounted payback period in years
Compute the discounted payback statistic for Project C if the appropriate cost of capital is 8...
Compute the discounted payback statistic for Project C if the 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 $880 $540 $340 Should the project be accepted or rejected? accepted rejected
Compute the discounted payback statistic for Project C if the appropriate cost of capital is 8...
Compute the discounted payback statistic for Project C if the 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: –$1,600 $720 $660 $700 $420 $220
Compute the discounted payback statistic for Project C if the appropriate cost of capital is 8...
Compute the discounted payback statistic for Project C if the 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 $880 $540 $340
Compute the discounted payback statistic for Project C if the appropriate cost of capital is 6...
Compute the discounted payback statistic for Project C if the appropriate cost of capital is 6 percent and the maximum allowable discounted payback period is three years. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Project C Time: 0 1 2 3 4 5 Cash flow –$2,900 $1,240 $1,050 $1,090 $680 $480 Discounted payback period years Should the project be accepted or rejected? Rejected Accepted
Compute the discounted payback statistic for Project C if the appropriate cost of capital is 7...
Compute the discounted payback statistic for Project C if the appropriate cost of capital is 7 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: –$1,700 $760 $690 $730 $440 $240
Compute the discounted payback statistic for Project C if the appropriate cost of capital is 7...
Compute the discounted payback statistic for Project C if the appropriate cost of capital is 7 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: –$1,400 $640 $600 $640 $380 $180 Should the project be accepted or rejected? accepted rejected
Compute the discounted payback statistic for Project C if the appropriate cost of capital is 7...
Compute the discounted payback statistic for Project C if the appropriate cost of capital is 7 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: –$2,400 $1,040 $900 $940 $580 $380 Should the project be accepted or rejected? Discounted payback period______ years accepted rejected
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: –$12,400 $3,490 $4,460 $1,800 $0 $1,280
Compute the discounted payback statistic for Project D if the appropriate cost of capital is 13...
Compute the discounted payback statistic for Project D if the appropriate cost of capital is 13 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    $ -11,800          $3,430             $4,340           $1,680             $0          $1,160 Discounted Payback Period = Should this be rejected...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT