discounted pay back method which is the time needed to pay back the original investment...

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Finance

discounted pay back method which is the time needed to pay back the original investment in terms of discounted future cash flows.

Analyze the numbers in the problem.

Use a 10% discount rate.

Year Project A Project B Project C
2018 ($3,000,000) ($3,000,000) ($3,200,000)
2019 $0 $975,000 $985,000
2020 $600,000 $975,000 $925,000
2021 $900,000 $975,000 $995,000
2022 $2,700,000 $975,000 $975,000

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