Question

Asked Nov 20, 2019

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Compute the discounted payback statistic for Project D if the appropriate cost of capital is 11 percent and the maximum allowable discounted payback is four years. **(Do not round intermediate calculations and round your final answer to 2 decimal places. If the project does not pay back, then enter a "0" (zero).)**

Project D | ||||||

Time: | 0 | 1 | 2 | 3 | 4 | 5 |

Cash flow: | −$12,600 | $3,510 | $4,500 | $1,840 | $0 | $1,320 |

Discounted payback period: ____.__years

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Step 1

Discounting payback period describes the time period the investment will take to cover the initial investment cost.

The formula to calculate payback period is given below:

Step 2

The table below shows the cash inflow for each year and cumulative cash flows for project A.

Step 3

From the table, it can be concluded that cumulative cash flow did not become zero before 4th year and the ma...

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