An investment project has annual cash inflows of $3,700, $4,600, $5,800, and $5,000, for the next four years, respectively. The discount rate is 13 percent. a. What is the discounted payback period for these cash flows if the initial cost is $6,400? (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 $8,500? (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 $11,500? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 16EB: Project Y cost $8,000 and will generate net cash inflows of $1,500 in year one, $2,000 in year two,...
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An investment project has annual cash inflows of $3,700, $4,600, $5,800, and $5,000,
for the next four years, respectively. The discount rate is 13 percent.
a. What is the discounted payback period for these cash flows if the initial cost is
$6,400? (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
$8,500? (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
$11,500? (Do not round intermediate calculations and round your answer to 2
decimal places, e.g., 32.16.)
> Answer is complete but not entirely correct.
a. Discounted payback period
22.92 years
b. Discounted payback period
2.23 years
c. Discounted payback period
2.78 years
Transcribed Image Text:An investment project has annual cash inflows of $3,700, $4,600, $5,800, and $5,000, for the next four years, respectively. The discount rate is 13 percent. a. What is the discounted payback period for these cash flows if the initial cost is $6,400? (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 $8,500? (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 $11,500? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) > Answer is complete but not entirely correct. a. Discounted payback period 22.92 years b. Discounted payback period 2.23 years c. Discounted payback period 2.78 years
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ISBN:
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