A project that just breaks even on a cash basis has a discounted payback period equal to its life.

Question

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The discounted payback period is the time it takes for the net present value of the cash flows to equal the initial investment. If a project just breaks even on a cash basis, its discounted payback period would be longer than its life, because discounting reduces the value of future cash flows, making it take longer to recover the initial investment.

A Project That Just Breaks Even on a Cash Basis