An investment project costs $18,000 and has annual cash flows of $3,900 for six years. Required: What
Question:
An investment project costs $18,000 and has annual cash flows of $3,900 for six years.
Required:
What is the discounted payback period if the discount rate is zero percent?
What is the discounted payback period if the discount rate is 6 percent?
What is the discounted payback period if the discount rate is 21 percent?
Discount RateDepending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal... Payback Period
Payback period method is a traditional method/ approach of capital budgeting. It is the simple and widely used quantitative method of Investment evaluation. Payback period is typically used to evaluate projects or investments before undergoing them,...
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Year 0 1 2 3 4 5 6 CF 18000 3900 3900 3900 3900 3900 3900 At zero percent PVF 10000 10000 10000 1...View the full answer
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Related Book For 
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th Edition
Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan
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