Discounted payback is a breakeven measure similar to the conventional payback, except that the cash flows in each year are discounted to Year 0 by the projects cost of capital, but they are kept at their original positions on the time line. Then, these discounted dollar amounts are used to calculate payback. With this approach to the calculation, the discounted payback solves the conventional paybacks problem of not considering the projects cost of capital in the payback calculation. In other words, discounted payback takes into consideration the time value of money. Applied to Baysides open MRI project, the discounted payback is 4.9 years, compared to a conventional payback of 4.2 years. (Taken from For Your Consideration on page 268 in your text)

What is your opinion of discounted payback? Does it make sense that the discounted payback is longer than the conventional payback? Is it a better measure of project liquidity than the conventional payback?