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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 ​$(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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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 ago
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