Delta Enterprises, Inc. has a WACC of 10% and is considering a project that requires a...

Question

Question

Delta Enterprises, Inc. has a WACC of 10% and is considering a project that requires a...

Delta Enterprises, Inc. has a WACC of 10% and is considering a project that requires a cash outlay of $1,250 now with cash inflows of $500 at the end of each year for the next 5 years. What is the project’s Discounted Payback?

business finance

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Year	Cash flows	Present value@10%	Cumulative Cash flows
0	(1250)	(1250)	(1250)
1	500	454.55	(795.45)
2	500	413.22	(382.23)
3	500	375.66	(6.57)
4	500	341.51	334.94
5	500	310.46	645.4

Hence discounted Payback period=Last period with a negative cumulative cash flow+(Absolute value of cumulative cash flows at that period/Cash flow after that period).

=3+(6.57/341.51)

=3.02 years(Approx).

Add a comment

Answer 2

Similar Homework Help Questions

Delta Enterprises, Inc. has a WACC of 10% and is considering a project that requires a...

Delta Enterprises, Inc. has a WACC of 10% and is considering a project that requires a cash outlay of $1,250 now with cash inflows of $500 at the end of each year for the next 5 years. What is the project’s Discounted Payback? Enter your answer rounded to two decimal places.
Delta Enterprises, Inc. has a WACC of 12% and is considering a project that requires a...

Delta Enterprises, Inc. has a WACC of 12% and is considering a project that requires a cash outlay of $1,250 now with cash inflows of $500 at the end of each year for the next 5 years. What is the project’s Discounted Payback? Enter your answer rounded to two decimal places. For example, if your answer is 12.345 then enter as 12.35 in the answer box.
Beta Enterprises, Inc. has a WACC of 11% and is considering a project that requires a...

Beta Enterprises, Inc. has a WACC of 11% and is considering a project that requires a cash outlay of $1,150 now with cash inflows of $575 at the end of Year 1, $495 at the end of Year 2, and $875 at the end of Year 3. What is the project's discounted payback? Note: Enter your answer rounded off to two decimal points since discounted payback is in terms of years and fractions of years. For example, if your answer...

Delta Enterprises, Inc. has a WACC of 13.50% and is considering a project that requires a cash outlay of $2,795 now with cash inflows of $595 at the end of each year for the next 10 years. What is the...

Delta Enterprises, Inc. has a WACC of 13.50% and is considering a project that requires a cash outlay of $2,795 now with cash inflows of $595 at the end of each year for the next 10 years. What is the project's MIRR? Enter your answer rounded to two decimal places. Do not enter % in the answer box. For example, if your answer is 0.12345 or 12.345% then enter as 12.35 in the answer box.
Alpha Enterprises, Inc. has a WACC of 14.50% and is considering a project that requires a...

Alpha Enterprises, Inc. has a WACC of 14.50% and is considering a project that requires a cash outlay of $1,850 now with cash inflows of $675 at the end of year 1, $600 at the end of year 2, $725 at the end of year 3, $700 at the end of year 4, and $550 at the end of year 5. What is the project's NPV? Note: Enter your answer rounded to two decimal places. Do not enter $ or comma...
Gamma Enterprises, Inc. has a WACC of 12.25% and is considering a project that requires a cash outlay of $1,895 now with...

Gamma Enterprises, Inc. has a WACC of 12.25% and is considering a project that requires a cash outlay of $1,895 now with cash inflows of $975 at the end of year 1, $650 at the end of year 2, $850 at the end of year 3, and $925 at the end of year 4. What is the project's profitability index? Note: Enter your answer rounded off to four decimal places since profitability index is usually shown as a number not...

Alpha Enterprises, Inc. is considering a project that has the following cash flows: Year Cash Flow...

Alpha Enterprises, Inc. is considering a project that has the following cash flows: Year Cash Flow 0 -$1,000 1 500 2 300 3 700 4 400 The company’s WACC is 10%. What is the project’s ordinary payback?
Alpha Enterprises, Inc. is considering a project that has the following cash flows: Year: Cash Flow;...

Alpha Enterprises, Inc. is considering a project that has the following cash flows: Year: Cash Flow; 0: -$1,000 1: 500 2: 300 3: 900 4: 400 The company’s WACC is 10%. What is the project’s ordinary payback? Enter your answer rounded to two decimal places.
Feg INC. is considering a project that has the following cash flow. What is the project’s...

Feg INC. is considering a project that has the following cash flow. What is the project’s discounted payback? The WACC is 10%. Year Cash flow from project 0 -$700 1 $400 2 $500 3 $200

11:38 PM Mon Oct 28 80%- Exit Question 4 1 pts Delta Enterprises, Inc. has a...

11:38 PM Mon Oct 28 80%- Exit Question 4 1 pts Delta Enterprises, Inc. has a WACC of 11.50 % and is considering a project that requires a cash outlay of $2,795 now with cash inflows of $595 at the end of each year for the next 10 years. What is the project's MIRR? Enter your answer rounded to two decimal places. Do not enter % in the answer box. For example, if your answer is 0.12345 or 12.345% then...

Delta Enterprises, Inc. has a WACC of 10% and is considering a project that requires a...

Homework Answers