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25 July, 20:54

What is the discounted payback period for these cash flows if the initial cost is $11,800?

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  1. 25 July, 21:09
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    C) initial cost = 11800

    This time it will take you full 4 years

    5300/1.13^4 = 3250.59

    14855.44 - 8800 = 3055.44

    cash required in year 4 = 3250.59 - 3055.44 = 195.15

    time required in year 4 = 195.15 / 3250.59 = 0.06

    Discounted payback period = year 1 + year 2 + year 3 + 0.06 = 3.06 years
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