Question

​(Discounted payback period​) ​ Gio's Restaurants is considering a project with the following expected cash​ flows:

Year	Project Cash Flow​ (millions)
0	​$(180​)
1	100
2	65
3	100
4	110

If the​ project's appropriate discount rate is 13 ​percent, what is the​ project's discounted payback​ period?

The​ project's discounted payback period is _____ years.  ​(Round to two decimal​ places.)

Answer 1

Please find the answer below
Statement showing computation:
Calculation of discounted payback period:
Discounted PBP
Time	Amount	PVf	PV	Cumulative
-	(180.00)	1.0000	(180.00)	(180.00)
1.00	100.00	0.8850	88.50	(91.50)
2.00	65.00	0.7831	50.90	(40.60)
3.00	100.00	0.6931	69.31	28.71
4.00	110.00	0.6133	67.47	96.17
PBP = 2+40.60/69.31
PBP = 2+0.59= 2.59
Discounted payback period is 2.59 years