An investment project has annual cash inflows of $8,800, $7,900, $8,200, and $8,600, and a discount...

An investment project has annual cash inflows of $8,800, $7,900, $8,200, and $8,600, and a discount rate of 13 percent. If the initial cost is $24,400, the discounted payback period for these cash flows is_____ years. (Round your answer to 2 decimal places. (e.g., 32.16))

Expert Solution

ANSWER = 3.9 YRS

YEAR	CASH INFLOW (A)	PVF (13%) (B)	PV OF CASH INFLOW (A) * (B)	CUMMULATIVE PV OF CASH INFLOWS
1	8,800	0.885	7,788	7,788
2	7,900	0.783	6,185.7	13,973.7
3	8,200	0.693	5,682.6	19,656.3
4	8,600	0.613	5,271.8	24,928.1
			24,928.1

24, 400- 19,656.3 DISCOUNTED PAYBACK PERIOD - 3yrs + 5,271.8rs

DISCOUNTED PAYBACK PERIOD - 3yrs + 5,271.8 rs

DISCOUNTED PAYBACK PERIOD = 3yrs +0.9yrs

DISCOUNTED PAYBACK PERIOD = 3.9yrs

jeff jeffy answered 1 year ago

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