Corporate Finance
12th Edition
ISBN: 9781259918940
Author: Ross, Stephen A.
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Question
Chapter 5, Problem 4QAP
Summary Introduction
Discounted Payback period:
Payback period determine the period within which the investment is able to recover the cost or amount invested. This is referred as a period at which the investor is at par with all the cash recovered that have been invested. However, the cumulative cashflows shall be taken after computing the
Requirement 1
To determine:
The project to be accepted as per discounted payback period at 0%.
Requirement 2
To determine:
The project to be accepted as per discounted payback period at 10%.
Requirement 3
To determine:
The project to be accepted as per discounted payback period at 17%.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Calculating Discounted Payback An investment project costs $15,100 and has annual cash flows of $3,900 for 6 years. What is the discounted payback period if the discount rate is 0 percent? What if the discount rate is 10 percent? If it is 17 percent?
An investment project costs $14,100 and has annual cash flows of $3,200 for six years.
a. What is the discounted payback period if the discount rate is zero percent?
Discounted payback period
b. What is the discounted payback period if the discount rate is 3 percent?
Discounted payback periód
An investment project costs $15,300 and has annual cash flows of $3,700 for six years.
a. What is the discounted payback period if the discount rate is zero percent?
Discounted payback period
b. What is the discounted payback period if the discount rate is 4 percent?
Discounted payback period
c. What is the discounted payback period if the discount rate is 20 percent?
Discounted payback period
Chapter 5 Solutions
Corporate Finance
Ch. 5 - Payback Period and Net Present Value If a project...Ch. 5 - Net Present Value Suppose a project has...Ch. 5 - Comparing Investment Criteria Define each of the...Ch. 5 - Payback and Internal Rate of Return A project has...Ch. 5 - Prob. 5CQCh. 5 - Capital Budgeting Problems What are some of the...Ch. 5 - Prob. 7CQCh. 5 - Prob. 8CQCh. 5 - Net Present Value versus Profitability Index...Ch. 5 - Internal Rate of Return Projects A and B have the...
Ch. 5 - Net Present Value You are evaluating Project A and...Ch. 5 - Modified Internal Rate of Return One of the less...Ch. 5 - Net Present Value It is sometimes stated that the...Ch. 5 - Prob. 14CQCh. 5 - Prob. 1QAPCh. 5 - Prob. 2QAPCh. 5 - Prob. 3QAPCh. 5 - Prob. 4QAPCh. 5 - Prob. 5QAPCh. 5 - Prob. 6QAPCh. 5 - Prob. 7QAPCh. 5 - Prob. 8QAPCh. 5 - Prob. 9QAPCh. 5 - Prob. 10QAPCh. 5 - NPV versus IRR Consider the following cash flows...Ch. 5 - Prob. 12QAPCh. 5 - Prob. 13QAPCh. 5 - Prob. 14QAPCh. 5 - Prob. 15QAPCh. 5 - Comparing Investment Criteria Consider the...Ch. 5 - Prob. 17QAPCh. 5 - Comparing Investment Criteria Consider the...Ch. 5 - Prob. 19QAPCh. 5 - Prob. 20QAPCh. 5 - MIRR Suppose the company in the previous problem...Ch. 5 - Prob. 22QAPCh. 5 - Prob. 23QAPCh. 5 - Prob. 24QAPCh. 5 - Prob. 25QAPCh. 5 - Prob. 26QAPCh. 5 - Prob. 27QAPCh. 5 - Prob. 28QAPCh. 5 - Prob. 29QAPCh. 5 - Prob. 30QAPCh. 5 - Construct a spreadsheet to calculate the payback...Ch. 5 - Based on your analysis, should the company open...Ch. 5 - Prob. 3MC
Knowledge Booster
Similar questions
- How much must be invested now to receive $30,000 for 10 years if the first $30.000 is received one year from now and the rate is 8%?arrow_forwardIf 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?arrow_forwardInternal rate of return A project is estimated to cost 463,565 and provide annual net cash flows of 115,000 for nine years. Determine the internal rate of return for this project, using the present value of an annuity table appearing in Exhibit 5 of this chapter.arrow_forward
- An investment project costs $16,800 and has annual cash flows of $4, 100 for six years. a. What is the discounted payback period if the discount rate is zero percent? b. What is the discounted payback period if the discount rate is 6 percent? c. What is the discounted payback period if the discount rate is 21 percent?arrow_forwarda) The cost of a proposed project is $10,000 and has annual cash flows pf $2,900 for six years. a. What is the discounted payback period if the discount rate is 0.5%? b. What is the discounted payback period if the discount rate is 5%? c. What is the discounted payback period if the discount rate is 20%?arrow_forwardAn investment project costs$13,700and has annual cash flows of$3,500for six years. a) What is the discounted payback period if the discount rate is 4 percent? b) What is the discounted payback period if the discount rate is 18 percent? Need typed answer only .No playgarismarrow_forward
- An investment project costs $21,500 and has annual cash flows of $6,500 for 6 years. If the discount rate is 15 percent, what is the discounted payback period? Select one: a. 5.71 b. 3.91 c. 4.21 d. 4.91 e. 5.91arrow_forwardAnswerarrow_forward(Calculating the payback period, NPV, PI, and IRR) You are considering a project with an initial cash outlay of $75,000 and expected cash flows of $21,750 at the end of each year for six years. The discount rate for this project is 9.9 percent. a. What are the project's payback and discounted payback periods? b. What is the project's NPV? c. What is the project's PI? d. What is the project's IRR? a. The payback period of the project is years. (Round to two decimal places.)arrow_forward
- Want solutionarrow_forwardAn investment project costs $15,000 and has annual cash flows of $4,300 for six years. What is the discounted payback period if the discount rate is zero percent? What if the discount rate is 5 percent? If it is 19 percent? Note: Please you dont use excel!arrow_forwardWhat is the NPV of a project with an initial investment of $100, a cash flow in one year of $105, and a discount rate of 10 percent?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT