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Given the following cash flows for a capital project, calculate its payback period and discounted payback period. The required rate of return is 8 percent.
Given the following cash flows for a capital project, calculate its payback period and discounted payback period. The required rate of return is 8 percent.
Year | ||||||
0 | 1 | 2 | 3 | 4 | 5 | |
Cash Flows | $-58300 | $14350 | $19150 | $24300 | $13500 | $3050 |
The discounted payback period is
| 0.62 year longer than the payback period. |
| 0.78 year longer than the payback period. |
| 0.90 years longer than the payback period. |
| 0.32 years longer than the payback period. |
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