2. value: 1.00 points An investment project costs $10,000 and has annual cash fl
ID: 2648562 • Letter: 2
Question
2.
value:
1.00 points
An investment project costs $10,000 and has annual cash flows of $2,800 for six years.
What is the discounted payback period if the discount rate is zero percent? (Enter 0 if the project never pays back. Round your answer to 2 decimal places. (e.g., 32.16))
What is the discounted payback period if the discount rate is 4 percent? (Enter 0 if the project never pays back. Round your answer to 2 decimal places. (e.g., 32.16))
What is the discounted payback period if the discount rate is 21 percent? (Enter 0 if the project never pays back. Round your answer to 2 decimal places. (e.g., 32.16))
3.
value:
1.00 points
2.
value:
1.00 points
An investment project costs $10,000 and has annual cash flows of $2,800 for six years.
What is the discounted payback period if the discount rate is zero percent? (Enter 0 if the project never pays back. Round your answer to 2 decimal places. (e.g., 32.16))
Discounted payback period years
What is the discounted payback period if the discount rate is 4 percent? (Enter 0 if the project never pays back. Round your answer to 2 decimal places. (e.g., 32.16))
Discounted payback period years
What is the discounted payback period if the discount rate is 21 percent? (Enter 0 if the project never pays back. Round your answer to 2 decimal places. (e.g., 32.16))
Discounted payback period years
3.
value:
1.00 points
Year Cash Flow 0
Explanation / Answer
1. Since the discount rate is zero %, inflows are not discounted. Hence, annual cash flows are treated at par. Discounted pay back is = initial investment / annual cash flow = 10000/2800 = 3.57 years 2 Year Cash Flow Present Value Factor @ 4% Discounted Cash Flow Cumulative Discounted n CF PV$1=1/(1+i)n CF
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