Question

Taggart Inc. is considering a project that has the following cash flow data. What is the project's payback?

Year 0 1 2 3

Cash flows -$1,125 $500 $500 $500

a. 2.25 years b. 2.07 years c. 1.87 years d. 2.41 years e. 2.50 years

Answer #1

Payback period= Full years until recovery + unrecovered cost at the start of the year/cash flow during the year

Payback period= 2 years + 125/ 500

= 2 years + 0.25

= 2.25 years.

Therefore, the payback period of the project is **2.25
years.**

Hence, the answer is **option a.**

In case of any query, kindly comment on the solution.

Susmel Inc. is considering a project that has the following cash
flow data. What is the project's payback?
Year
0
1
2
3
Cash flows
-$475
$150
$200
$300
a. 2.88 years
b. 1.96 years
c. 2.42 years
d. 2.47 years
e. 2.85 years

. GBN Inc. is considering a project that has the following cash
flow data. What is the project's payback period?
Year
0
1
2
3
Cash flows
-$450
$200
$100
$200
Select one:
a. 2.5 years
b. 1.75 year
c. 2.75 years
d. 2 years

Mansi Inc. is considering a project that has the following cash
flow data. What is the project's payback?
Year 0 1 2 3
Cash
flows -$750 $300 $325 $200
Hint: Payback period: The number of years required to recover a
project’s cost. Cumulative cash flow computation ignores the time
value of money by using actual cash flows.
Group of answer choices
2.50 years
2.36 years
2.63 years
2.42 years
2.83 years

Talent Inc. is considering a project that has the following cash
flow and WACC data.
WACC: 8%
Year 0 1 2 3
Cash flows -$1,200 $400 $500 $500
(1) What is the project's NPV?
(2) What is the project's IRR?
(3) What is the project's Payback Period?
(4) What is the project's Discounted Payback Period?

Masulis Inc. is considering a project that has the following
cash flow and WACC data. What is the project's discounted payback?
WACC: 10.00%
Year 0 1 2 3 4
Cash flows -$1,300 $525 $485 $445 $405
Group of answer choices
3.32 years 2.62 years 2.75 years 3.42 years

Associates is considering a project that has the following cash
flow data. What is the project's payback?
Year 0 1 2 3 4 5
Cash flows -$2,300 $500 $520 $540 $560 $580

Rocket Inc. is considering a project that has the following cash
flow and WACC data. WACC: 10.00% Year 0 1 2 3 4 Cash flows -$1,000
$510 $440 $425 $405 What is the project's payback? What is the
project's discounted payback? Is the project worthwhile to
undertake? (Would you undertake the project?) Why?

Q1.
Babcock Inc. is considering a project that has the following
cash flow and WACC data. What is the project's NPV? Enter your
answer rounded to two decimal places. Do not enter $ or comma in
the answer box. For example, if your answer is $12,300.456 then
enter as 12300.46 in the answer box.
WACC:
13%
Year:
0
1
2
3
Cash flows:
-$1,250
$400
$500
$600
Q2.
Garvin Enterprises is considering a project that has the
following cash flow...

Anderson Systems is considering a project that has the following
cash flow and WACC data. What is the project's NPV? Note that if a
project's projected NPV is negative, it should be rejected.
WACC:
11.00%
Year
0
1
2
3
Cash flows
-$1,000
$500
$500
$500
a. 0241.82
b. 0257.35
c. 0195.23
d. 0259.57
e. 0221.86

Thorley Inc. is considering a project that has the following
cash flow data. What is the project's IRR? Note that a project's
projected IRR can be less than the WACC or negative, in both cases
it will be rejected. Excel version please!
Year
0
1
2
3
4
5
Cash flows
-$1,100
$325
$325
$325
$325
$325
a.
14.59%
b.
15.18%
c.
11.24%
d.
16.20%
e.
13.43%

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