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Compute the discounted payback statistic for Project C if the appropriate cost of capital is 7...

Compute the discounted payback statistic for Project C if the appropriate cost of capital is 7 percent and the maximum allowable discounted payback period is three years. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Project C Time: 0 1 2 3 4 5 Cash flow: –$1,700 $760 $690 $730 $440 $240

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Solution :

The discounted payback statistic for Project C if the appropriate cost of capital is 7 percent is = 2.65 years

Since the Discounted payback period is = 2.65 years which is lesser than the maximum allowable discounted payback period of 3 years, the project should be accepted.

Please find the attached screenshot of the excel sheet containing the detailed calculation for the above solution.

jeff jeffy answered 1 year ago
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