In: Finance
Compute the discounted payback statistic for Project D if the appropriate cost of capital is 12 percent and the maximum allowable discounted payback is four years. (Do not round intermediate calculations and round your final answer to 2 decimal places. If the project does not pay back, then enter a "0" (zero).)
Project D | ||||||
Time: | 0 | 1 | 2 | 3 | 4 | 5 |
Cash flow: | –$12,400 | $3,490 | $4,460 | $1,800 | $0 | $1,280 |
Ans 0 (zero)
Since the amount cannot be recovered during the lifetime of the project.
Year | Project Cash Flows (i) | DF@ 12% (ii) | PV of Project A ( (i) * (ii) ) | Cumulative Cash Flow | |
0 | -12400 | 1 | (12,400.00) | (12,400.00) | |
1 | 3490 | 0.893 | 3,116.07 | (9,283.93) | |
2 | 4460 | 0.797 | 3,555.48 | (5,728.44) | |
3 | 1800 | 0.712 | 1,281.20 | (4,447.24) | |
4 | 0 | 0.636 | - | (5,728.44) | |
5 | 1280 | 0.567 | 726.31 | (3,720.93) | |
NPV | (3,720.93) |