The management team is considering two hotel projects. Project A will be in Jamaica with an initial investment of $$865,000$ and Project B will be in Canada with an initial investment of $$750,000.$

Years Project A Project B

$1$ $$316,000\mathrm{.}00$ $$200,000\mathrm{.}00$

$2$ $$350,000\mathrm{.}00$ $$200,000\mathrm{.}00$

$3($$$20,000\mathrm{.}00)($$$15,000\mathrm{.}00)$

$4$ $$280,000\mathrm{.}00$ $$390,000\mathrm{.}00$

The cost of capital for Project A is $13\%$ and the cost of capital for Project B is $15\%.$

Calculate the Discounted Payback Period for Project A$.$

Question $17$Answer

a$.$

$3\mathrm{.}6$ years

b$.$

$4$ Years

c$.$

The initial outlay is never paid back $($recovered$).$

d$.$

$3\mathrm{.}78$ years