To see how we might calculate the discounted payback period, suppose we require a 12.5 percent return on new investments. We have an investment that costs $300 and has cash flows of $100 per year for five years. To get the discounted payback, we have to discount each cash flow at 12.5 percent and then start adding them. We do this in Table 9.3. In Table 9.3, we have both the discounted and the undiscounted cash flows. Looking at the accumulated cash flows, we see that the regular payback is almost exactly three years (look for the highlighted figure in Year 3). The discounted cash flows total $301 only after four years, so the discounte years, as shown. Document reading pane puyoun TABLE 9.3 International Corporations Cash Flow Accumulated Cash Flow Year Undiscounted Discounted Undiscounted Discounted 12345 $100 $89 $100 $ 89 2 100 79 200 168 100 70 300 238 100 62 400 301 100 55 500 356