Question

**Sky Enterprises is considering an investment project
with the following cash flows:**

**Year Cash
Flow**

**0
-$100,000**

**1
30,000**

**2
40,000**

**3
60,000**

**4
90,000**

The company has a 7% cost of capital. What is the project’s discounted payback period?

A. 2.76 years

B. 1.86 years

C. 1.86 years

D. 1.67 years

E. more than 3 years

Answer #1

**The discounted payback period is computed as shown
below:**

**Cumulative discounted cash flows from year 1 to year 2
is computed as follows:**

= $ 30,000 / 1.07^{1} + $ 40,000 / 1.07^{2}

**= $ 62,974.93231**

**Cumulative discounted cash flows from year 1 to year 3
is computed as follows:**

= $ 30,000 / 1.07^{1} + $ 40,000 / 1.07^{2} + $
60,000 / 1.07^{3}

**= $ 111,952.8049**

**It means that the discounted payback period lies between
year 1 and year 3, since the initial investment of $ 100,000 is
recovered between them. So, the discounted payback period will be
computed as follows:**

**= 2 years + Balance investment to be recovered / Year 3
discounted cash flow**

= 2 years + [ ($ 100,000 - $ 62,974.93231) / ( $ 60,000 /
1.07^{3}) ]

= 2 years + $ 37,025.06769 / $ 48,977.87261

**= 2.76 years Approximately**

**Feel free to ask in case of any query relating to this
question**

A project that requires an initial investment of $100,000 and
generates the following cash flows:
YEAR
CASH FLOWS
1
30,000
2
35,000
3
40,000
4
20,000
5
19,000
If the cost of capital is 8.5% have a discounted payback period
of _______________

project that requires an initial investment of $100,000 and
generates the following cash flows:
YEAR
CASH FLOWS
1
30,000
2
35,000
3
40,000
4
20,000
5
19,000
If the cost of capital is 8.5% have a discounted payback period
of _______________
Seleccione una:
3.856 years
2.875 years
3.665 years
2.856 years
3.875 years
not enough data to answer

(Discounted payback period) Sheinhardt Wig Company is
considering a project that has the following cash flows: If the
project's appropriate discount rate is 9 percent, what is the
project's discounted payback period? The project's discounted
payback period is nothing years. (Round to two decimal
places.)
YEAR PROJECT CASH FLOW
0 -60,000
1 20,000
2 50,000
3 65,000
4 55,000
5 40,000

Gio's Restaurants is considering a project with the following
expected cash? flows:
Year
Project Cash Flow? (millions)
0
?$(210?)
1
100
2
72
3
100
4
90
If the? project's
appropriate discount rate is
11percent, what is
the? project's discounted payback? period?
The? project's discounted payback period is ____
years? Round to 2 decimal places

You are considering a project
with the following set of cash flows:
Cash
flow
0
-5,500
1
2,000
2
3,000
3
1,000
4
2,000
a. What is
the payback period of this project? If the
pre-specified cut off is 3 years,
should this project be accepted?
b. What is
the discounted
payback period of this
project? If the
pre-specified cut off is 3 years, should this project be
accepted? The discount rate is
10%.

Polk Products is considering
an investment project with the following cash flows (in
000s):
Year 0
Year 1
Year 2
Year 3
Cashflow
-100
90
90
30
The company has a 10% cost of
capital.
What is the payback period for the
project?
What is the discounted payback period for the
project?
What is the IRR for the
project?
What is the NPV for the
project?
What is the MIRR for the
project?
PLEASE SHOW STEPS AND SOLUTION

Moon Enterprises has a project which has the following cash
flows:
Year
Cash Flow
0
-$500,000
1
150,000
2
200,000
3
350,000
4
140,000
5
225,000
The cost of capital is 14 percent. What is the project's
discounted payback?
Question 5 options:
3.10 years
2.53 years
2.91 years
2.18 years
2.64 years

Shannon Industries is considering a project which has the
following cash flows:
Year Cash Flow
0 ?
1 $2,000
2 $3,000
3 $3,000
4 $1,500
The project has a payback period of 2 years. The
firm’s cost of capital is 12 percent. What is
the project’s net present value? (round your answer
to the nearest $1.)
a. $ 570
b. $ 730
c. $2,266
d. $2,761
e. $3,766

coughlin motors is considering a project with the following
expected cash flows.
Year Cash flow
0 (700)
1 200
2 370
3 225
4 700
The project's cost of capital is 10%. What is the project's
discounted payback?

Cash Payback
Method
Lily Products Company
is considering an investment in one of two new product lines. The
investment required for either product line is $540,000. The net
cash flows associated with each product are as follows:
Year
Liquid Soap
Body Lotion
1
$170,000
$ 90,000
2
150,000
90,000
3
120,000
90,000
4
100,000
90,000
5
70,000
90,000
6
40,000
90,000
7
40,000
90,000
8
30,000
90,000
Total
$720,000
$720,000
a.
Recommend a product offering to Lily Products Company, based...

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