Question
The conventional payback period ignores the time value of money, and this concerns Blue Hamsters CFO. He has now asked you to compute Sigmas discounted
The conventional payback period ignores the time value of money, and this concerns Blue Hamsters CFO. He has now asked you to compute Sigmas discounted payback period, assuming the company has a 10% cost of capital. Complete the following table and perform any necessary calculations. Round the discounted cash flow values to the nearest whole dollar, and the discounted payback period to two decimal places. For full credit, complete the entire table. (Note: If your answer is negative, be sure to use a minus sign in your answer.)
| Year 0 | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|
| Cash flow | -$6,000,000 | $2,400,000 | $5,100,000 | $2,100,000 |
| Discounted cash flow |
|
|
|
|
| Cumulative discounted cash flow |
|
|
|
|
| Discounted payback period: | years |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Cost Accounting
Authors: Edward B. Deakin, Michael Maher
3rd Edition
0256069190, 978-0256069198
