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

ID: 2787454 • Letter: C

Question

Compute the discounted payback statistic for Project D if the appropriate cost of capital is 12 percent and the maximum allowable discounted payback is four years. (Do not round intermediate calculations. Round your final answer to 2 decimal places. If the project does not pay back, then enter a "0" (zero).)

  

  

Compute the discounted payback statistic for Project D if the appropriate cost of capital is 12 percent and the maximum allowable discounted payback is four years. (Do not round intermediate calculations. Round your final answer to 2 decimal places. If the project does not pay back, then enter a "0" (zero).)

Explanation / Answer

Project should be rejected Discounted PBP Time Amount PVf PV Cumulative                                                                                       -         (12,200.00)                      1.00                         (12,200.00)                         (12,200.00)                                                                                  1.00           3,470.00                 0.8929                              3,098.21                           (9,101.79)                                                                                  2.00           4,420.00                 0.7972                              3,523.60                           (5,578.19)                                                                                  3.00           1,760.00                 0.7118                              1,252.73                           (4,325.46)                                                                                  4.00                        -                   0.6355                                           -                             (4,325.46)                                                                                  4.00           1,240.00                 0.5674                                 703.61                           (3,621.85) Discounted Paybck period cannot be determined as Total cash inflow is less than cash outflow

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