Question
In: Finance
(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 $(150) 1 90 2 70 3 90 4 100 If the project's appropriate discount rate is 12 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
Ans 2.22 years
| Year | Project Cash Flows (i) | DF@ 12% (ii) | PV of Project A ( (i) * (ii) ) | Cumulative Cash Flow | |
| 0 | -150 | 1 | (150.00) | (150.00) | |
| 1 | 90 | 0.893 | 80.36 | (69.64) | |
| 2 | 70 | 0.797 | 55.80 | (13.84) | |
| 3 | 90 | 0.712 | 64.06 | 50.22 | |
| 4 | 100 | 0.636 | 63.55 | 113.77 | |
| TOTAL | 113.77 | ||||
| Discounted Payback Period = | 2 years + 13.84/64.06 | ||||
| 2.22 YEARS | |||||
jeff jeffy answered 1 year agoRelated Solutions
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