An investment project has annual cash inflows of $2,800, $3,700, $5,100, and $4,300, for the next...

An investment project has annual cash inflows of $2,800, $3,700, $5,100, and $4,300, for the next four years, respectively. The discount rate is 11 percent. What is the discounted payback period for these cash flows if the initial cost is $5,200?

How would I do this with the calculator?

Expert Solution

PFB the solution.. rate positively

	i	ii	iii=i*ii	iv
Year	Cash flow	PVIF @ 11%	Present value	Cumulative present value
0	-5200	1	(5,200.00)	(5,200.00)
1	2800	0.900901	2,522.52	(2,677.48)
2	3700	0.811622	3,003.00	325.53
3	5100	0.731191	3,729.08	4,054.60
4	4300	0.658731	2,832.54	6,887.14

Discounted payback period will lie between year 1 and 2

Discounted payback period =		1.89	Year
1+(2677.48/3003)

Ans =				1.89	Year

jeff jeffy answered 2 years ago

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