Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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An investment project costs $10,000 and has annual cash flows of $2,890 for six years.
a. What is the discounted payback period if the discount rate is zero percent? (Enter O if
the project never pays back. Do not round intermediate calculations and round
your answer to 2 decimal places, e.g., 32.16.)
b. What is the discounted payback period if the discount rate is 4 percent? (Enter O if
the project never pays back. Do not round intermediate calculations and round
your answer to 2 decimal places, e.g., 32.16.)
c. What is the discounted payback period if the discount rate is 21 percent? (Enter O if
the project never pays back. Do not round intermediate calculations and round
your answer to 2 decimal places, e.g., 32.16.)
a. Discounted payback period
b. Discounted payback period
c. Discounted payback period
years
years
years
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Transcribed Image Text:An investment project costs $10,000 and has annual cash flows of $2,890 for six years. a. What is the discounted payback period if the discount rate is zero percent? (Enter O if the project never pays back. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the discounted payback period if the discount rate is 4 percent? (Enter O if the project never pays back. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the discounted payback period if the discount rate is 21 percent? (Enter O if the project never pays back. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Discounted payback period b. Discounted payback period c. Discounted payback period years years years
Expert Solution
Check Mark
Step 1

Given,

Project Cost = $10,000

Annual Cash Flow = $2,890

Time period  = 6 Years.

 

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