The conventional payback period ignores the time value of money, and this concerns Cute Camel’s CFO. He has now asked you to compute Delta’s discounted payback period, assuming the company has a 7% cost of capital. Complete the following table and perform any necessary calculations. Round the discounted cash flow values to the nearest whole dollar, and the discounted payback period to two decimal places. For full credit, complete the entire table. (Note: If your answer is negative, be sure to use a minus sign in your answer.) Year 0Year 1Year 2Year 3Cash flow-$5,000,000$2,000,000$4,250,000$1,750,000Discounted cash flow                Cumulative discounted cash flow                Discounted payback period:     years

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Asked Feb 3, 2020
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The conventional payback period ignores the time value of money, and this concerns Cute Camel’s CFO. He has now asked you to compute Delta’s discounted payback period, assuming the company has a 7% cost of capital. Complete the following table and perform any necessary calculations. Round the discounted cash flow values to the nearest whole dollar, and the discounted payback period to two decimal places. For full credit, complete the entire table. (Note: If your answer is negative, be sure to use a minus sign in your answer.)
 
Year 0
Year 1
Year 2
Year 3
Cash flow -$5,000,000 $2,000,000 $4,250,000 $1,750,000
Discounted cash flow
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cumulative discounted cash flow
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Discounted payback period:
 
 
 
 
 years
     
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Expert Answer

Step 1

Computation of discounted cash flow, cumulative discounted cash flow and discounted payback period:

Excel spread sheet:

Finance homework question answer, step 1, image 1

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