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DuPont, Inc. is considering a project that costs $65 million and provides cash flows of $30 million for the first year, $25 million for the
DuPont, Inc. is considering a project that costs $65 million and provides cash flows of $30 million for the first year, $25 million for the second year, and $20 million for years three, four, and five. Assume a cost of capital of 14%.
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
-$65M $30M $25M $20M $20M $20M
What is the payback period of this project?
a. 2.50 years
b. 2.00 years
c. 2.17 years
d. 3.50 years
e. 3.25 years
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