Question

# An investment project costs \$23327 and has annual cash flows of \$10533 for six years. What...

An investment project costs \$23327 and has annual cash flows of \$10533 for six years. What is the discounted payback period if the discount rate is 5 percent?

#### Homework Answers

Answer #1
 Year Cash flows Present value@5% Cumulative Cash flows 0 (23327) (23327) (23327) 1 10533 10031.43 (13295.57) 2 10533 9553.74 (3741.83) 3 10533 9098.80 5356.97 4 10533 8665.53 14022.50 5 10533 8252.88 22275.38 6 10533 7859.89 30135.27(Approx).

Hence discounted Payback period=Last period with a negative cumulative cash flow+(Absolute value of cumulative cash flows at that period/Cash flow after that period).

=2+(3741.83/9098.8)

=2.41 years(Approx).

Know the answer?
Your Answer:

#### Post as a guest

Your Name:

What's your source?

#### Earn Coins

Coins can be redeemed for fabulous gifts.

##### Not the answer you're looking for?
Ask your own homework help question
ADVERTISEMENT
##### Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

ADVERTISEMENT