Compute the discounted payback statistic for Project D if the appropriate cost of capital is 13...

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Finance

Compute the discounted payback statistic for Project D if theappropriate cost of capital is 13 percent and the maximum allowablediscounted payback is four years. (Do not round intermediatecalculations and round your final answer to 2 decimal places. Ifthe project does not pay back, then enter a "0" (zero).

PROJECT D:

TIME             0                   1                    2                     3               4             5

Cash Flow    $-11,800         $3,430            $4,340          $1,680            $0          $1,160

Discounted Payback Period =

Should this be rejected YES or NO

Answer & Explanation Solved by verified expert
4.3 Ratings (757 Votes)
Cash flow for the Project D are Year 0 1 2 3 4 5 Cash flow 11800 3430 4340 1680 0 1160 For calculating the discounted payback period one needs to first find the discounted cash flow for each of the year Discounted cash flow for a year Cash flow for a year 1 discount raten where discount rate cost of capital and n year of cash flow Discounted cash flow for a year 0 11800 1 130 11800 Discounted cash flow for year 1 3430 1 131 3430 113    See Answer
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Compute the discounted payback statistic for Project D if theappropriate cost of capital is 13 percent and the maximum allowablediscounted payback is four years. (Do not round intermediatecalculations and round your final answer to 2 decimal places. Ifthe project does not pay back, then enter a "0" (zero).PROJECT D:TIME             0                   1                    2                     3               4             5Cash Flow    $-11,800         $3,430            $4,340          $1,680            $0          $1,160Discounted Payback Period =Should this be rejected YES or NO

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