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​(Discounted payback period​)​ Gio's Restaurants is considering a project with the following expected cash​ flows:  0...

​(Discounted payback period​)​ Gio's Restaurants is considering a project with the following expected cash​ flows:

 0

- 210

million

   1

       95

million

   2

       75

million

   3

       95

million

   4

     90

million

If the​ project's appropriate discount rate is 11 ​percent, what is the​ project's discounted payback​ period? The​ project's discounted payback period is _____years.

Solutions

Expert Solution

Discounted payback 2.91 years

We first compute the discounted cash flows and cumulative CF a below

Year cash flow (Million USD) Dscounted cash flow Cumulative DCF
0 -210 -210 -210
1 95 85.5856 -124.4144
2 75 60.8717 -63.5427
3 95 69.4632 5.9204
4 90 59.2858 65.2062

WORKINGS

jeff jeffy answered 11 months ago
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