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An investment project costs $16,700 and has annual cash flows of $3,200 for six years. a. What...

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Finance

An investment project costs $16,700 and has annual cash flows of$3,200 for six years.

a. What is the discounted payback period if the discount rate iszero percent?

b. What is the discounted payback period if the discount rate is3 percent?

c. What is the discounted payback period if the discount rate is22 percent?

Answer & Explanation Solved by verified expert
3.9 Ratings (450 Votes)
Discounted Payback Period Last Year with a Negative Cumulative Cash Flow Absolute Value of negative Cumulative Cash Flow in that year Total Present Cash Flow in the following year a Discounted Payback Period 5 700 3200 521875 years 522 years Hence the correct answer is 522 years Note Cash Flow Discounting Factor 0 Present Value Cash Flow    See Answer
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An investment project costs $16,700 and has annual cash flows of$3,200 for six years.a. What is the discounted payback period if the discount rate iszero percent?b. What is the discounted payback period if the discount rate is3 percent?c. What is the discounted payback period if the discount rate is22 percent?

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