Given the following cash flows for a capital project for the Johnson Corp., calculate its payback period and discounted payback period. The required rate of return is 8 percent.

Cashflows: Year 0 = -50,000; Year 1 = 15,000; Year 2 = 15,000; Year 3 = 20,000; Year 4 = 10,000; and Year 5 = 5,000.

The discounted payback period is _____________________

Multiple Choice

• 0.80 years longer than the payback period

• 1.01 years longer than the payback period

• 0.16 years longer than the payback period

• None of the above a through d is correct

• 1.85 years longer than the payback period