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​(Discounted payback period​) ​ Gio's Restaurants is considering a project with the following expected cash​ flows:...

​(Discounted payback period​) ​ Gio's Restaurants is considering a project with the following expected cash​ flows: Year Project Cash Flow​ (millions) 0 ​$(240​) 1 100 2 75 3 100 4 110 If the​ project's appropriate discount rate is 11 ​percent, what is the​ project's discounted payback​ period? The​ project's discounted payback period is nothing years.  ​(Round to two decimal​ places.)

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Expert Solution

Discounted PBP
Time Amount Pvfat 11% PV Cumulative
                                                                              -                 (240.00)                  1.0000               (240.00)               (240.00)
                                                                          1.00                  100.00                  0.9009                    90.09               (149.91)
                                                                          2.00                    75.00                  0.8116                    60.87                  (89.04)
                                                                          3.00                  100.00                  0.7312                    73.12                  (15.92)
                                                                          4.00                  110.00                  0.6587                    72.46                    56.54
Discounted Payback = 3 + 15.92/72.46
Discounted Payback = 3 + .22
Discounted Payback = 3.22 Years

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