Respuesta :
Answer:
3.84 years
0
Explanation:
The discounted payback period calculates how long it takes to recover the amount invested in a project from the discounted cash flow
When discount rate is 5%
Discounted cash flow in year 1 = $2,930 / 1.05 =$2,790.48
Discounted cash flow in year 2 = $2,930 / 1.05^2 = $2,657.60
Discounted cash flow in year 3 = $2,930 / 1.05^3 = $2,531.04
Discounted cash flow in year 4 = $2,930 / 1.05^4 = $2410.52
Discounted cash flow in year 5 = $2,930 / 1.05^5 = $2295.73
Discounted cash flow in year 6 = $2,930 / 1.05^6 =$ 2186.41
The amount invested is recovered within the 3 and 4th year = $10,000 - ($2,790.48 + $2,657.60 + $2,531.04) = $2020.88
The payback period is 3 years + $2020.88 / 2410.52 = 3.84 years
When the discounted cash flow in 19%
TO check if the amount invested would be recovered, calculate the present value
Cash flow each year from year 1 to 6 = $2930
I = 19%
PV = $-9.352
This shows that the amount invested is never recovered
To find the PV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
