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1. Discount rate of 4%, the cash outflow for project A is: 2. Discount rate of 12%, the cash outflow for project B is: 3.
1. Discount rate of 4%, the cash outflow for project A is:
2. Discount rate of 12%, the cash outflow for project B is:
3. Discount rate of 20%, the cash outflow for project B is:
4. As the discount rate increased, the discount payback perioud (increase or decrease). The reason is that the future dollars are worth (more or less) in present value as the discount rate increases requiring (more or less) future dollars to recover the present value of the outlay.
20%. What do you notice about the payback period as the discount rate rises? Explain this relationship Cost Cash flow year 1 Cash flow year 2 Cash flow year 3 Cash flow year 4 Cash flow year 5 Cash flow year 6 $8,000 $2,857 $2,857 $2,857 $2,857 $2,857 $2,857 $90,000 $9,000 $18,000 $27,000 $36,000 $13,500 $0 With a discount rate of 4%, the cash outflow for project A is: (Select the best response.)Step by Step Solution
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