An investment project costs $10,000 and has annual cash flows of $2,930 for six years. ...

An investment project costs $10,000 and has annual cash flows of $2,930 for six years.

What is the discounted payback period if the discount rate is zero percent?

What is the discounted payback period if the discount rate is 5 percent?

What is the discounted payback period if the discount rate is 19 percent?

Solutions

Expert Solution

a) zero per cent

b) 5%

c) 19%

The costs will not be recovered by 6 years if discounted at 19%.

jeff jeffy answered 9 months ago

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