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Capital investment project is estimated to have the following after-ta cash flows, by year: Year 0: ($-50,000) Year 1: $15,000 Year 2: $7,500 Year 3:
Capital investment project is estimated to have the following after-ta cash flows, by year:
Year 0: ($-50,000)
Year 1: $15,000
Year 2: $7,500
Year 3: $7,500
Year 4: $25,000
The company utilizes a discount rate of 13.5% to evaluate capital projects. You may have rounding errors in your calculations to choose the closest answer. Assume cash flows are received equally over the year.
the discounted payback for the project shown above is:
a. 2.27
b. 4.86
c. 3.66
d. 3.96
e. does not pay back
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