A project has an initial cost of $10,800 and produces cash inflows of $4,100,$4,800,and $5,600 over Years 1 to 3,respectively.What is the discounted payback period if the required rate of return is 11 percent?
A)2.13 years
B)2.34 years
C)2.78 years
D)2.91 years
E)Never

Question

Quizplus · Accepted Answer

Discounted cash flows:Year 1 = $4,100/1.11 = $3,693.69Year 2 = $4,800/1.11² = $3,895.79Year 3 = $5,600/1.11³ = $4,094.67Discounted payback period = 2 + ($10,800 - 3,693.69 - 3,895.79)/$4,094.67 = 2.78 years

A Project Has an Initial Cost of $10,800 and Produces