An investment project has annual cash inflows of $4,900, $3,400,$4,600, and $3,800, for the next four years, respectively. The discountrate is 13 percent.a. What is the discounted payback period for these cash flows if theinitial cost is $5,200?b. What is the discounted payback period for these cash flows if theinitial cost is $7,300?c. What is the discounted payback period for these cash flows if theinitial cost is $10,300?

The discounted payback period is a capital budgeting procedure used to determine the profitability…

Answered: An investment project has annual cash…

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter26: Capital Investment Analysis

Section: Chapter Questions

Problem 4CMA

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Project Y cost $8,000 and will generate net cash inflows of $1,500 in year one, $2,000 in year two, $2,500 in year three, $3,000 in year four and $2,000 in year five. What is the NPV using 8% as the discount rate?
A project has an initial cost of 40,000, expected net cash inflows of 9,000 per year for 7 years, and a cost of capital of 11%. What is the projects NPV? (Hint: Begin by constructing a time line.)
Project X costs $10,000 and will generate annual net cash inflows of $4,800 for five years. What is the NPV using 8% as the discount rate?
If a copy center is considering the purchase of a new copy machine with an initial investment cost of $150,000 and the center expects an annual net cash flow of $20,000 per year, what is the payback period?
Buena Vision Clinic is considering an investment that requires an outlay of 600,000 and promises a net cash inflow one year from now of 810,000. Assume the cost of capital is 10 percent. Required: 1. Break the 810,000 future cash inflow into three components: a. The return of the original investment b. The cost of capital c. The profit earned on the investment 2. Now, compute the present value of the profit earned on the investment. 3. Compute the NPV of the investment. Compare this with the present value of the profit computed in Requirement 2. What does this tell you about the meaning of NPV?
An investment project has annual cash inflows of $5,000, $5,500, $6,000, and $7,000, and a discount rate of 11 percent.a) What is the discounted payback period for these cash flows if the initial cost is $8.000? b) What is the discounted payback period for these cash flows if the initial cost is $12,000? c) What is the discounted payback period for these cash flows if the initial cost is $16,000?
An investment project has annual cash inflows of $4,000, $4,900, $6,100, and $5,300, for the next four years, respectively. The discount rate is 13 percent. What is the discounted payback period for these cash flows if the initial cost is $6,700? What is the discounted payback period for these cash flows if the initial cost is $8,800? What is the discounted payback period for these cash flows if the initial cost is $11,800?
An investment project has annual cash inflows of $4,200, $5,300, 6,100 and $7,400 and a discount rate of 14 percent. What is the discounted payback period for these cash flows if the initial cost is $7,000? What is the discounted payback period for these cash flows if the initial cost is $10,000? What is the discounted payback period for these cash flows if the initial cost is $13,000? Do not round intermediate calculations and round your final answer to 2 decimal places.
An investment project has annual cash inflows of $5,000, $5,500, $6,000, and $7,000, and a discount rate of 11 percent.What is the discounted payback period for these cash flows if the initial cost is$8.000?
An investment project has annual cash inflows of $3,500, $4,400, $5,600, and $4,800, and a discount rate of 14 percent. a. What is the discounted payback period for these cash flows if the initial cost is $6,200? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the discounted payback period for these cash flows if the initial cost is $8,300? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the discounted payback period for these cash flows if the initial cost is $11,300? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
An investment project has annual cash inflows of $6,400, $7,500, $8,300 for the next four years, respectively, and $9,600, and a discount rate of 20 percent. What is the discounted payback period for these cash flows if the initial cost is $9,500?
An investment project has annual cash inflows of $4,800, $3,500, $4,700, and $3,900, for the next four years, respectively. The discount rate is 15 percent. a. What is the discounted payback period for these cash flows if the initial cost is $5,300? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the discounted payback period for these cash flows if the initial cost is $7,400? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the discounted payback period for these cash flows if the initial cost is $10,400? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Discounted payback period years b. Discounted payback period years c. Discounted payback period years

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