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an investment project has annual cash inflows of $5,200, $6,300, $7,100, and $8,400, and a discount rate of 19 percent. what is the discounted payback period for these cash flows if the initial cost is $8,000?

Respuesta :

According to question, It will take 1 year 294 days to cover the initial investment.

Initial investment= $8,000

Cash Flow :

CF1 : $5200

CF2 :$6300

CF3 :$7100

CF4 :$8400

Discount Rate : 19%

The time needed to recover the initial investment is known as the payback period. We must reduce each cash flow.

Year 1 : 5,200 / 1.19 - $8,000 = 3630.25

Year 2 : 6300/ [tex]1.19^{2}[/tex] - 3630.25 = 818.58

To be more accurate:

   (3630.25/4448.83) * 360 = 294 (approx)

To know more about payback period visit :

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