Compute the discounted payback statistic for Project C if the appropriate cost o

Question

Compute the discounted payback statistic for Project C if the appropriate cost of capital is 7 percent and the maximum allowable discounted payback period is three years. (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Compute the discounted payback statistic for Project C if the appropriate cost of capital is 7 percent and the maximum allowable discounted payback period is three years. (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Explanation / Answer

7% Year Cash Flow PV of $1 @7% PV of Cash Flows Cumulative Discounted Cash Flow 0 -2000 1.0000 -2000.00 -2000.00 1 880 0.9346 822.43 -1177.57 2 780 0.8734 681.28 -496.29 3 820 0.8163 669.36 173.08 4 500 0.7629 381.45 554.52 5 300 0.7130 213.90 768.42 Discounted Pay Back Period= 2 years+(496.29/669.39)=2.7414 years

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