5. Problem 11.05 (Discounted Payback) eBook Project L costs $60,000, its expected cash inflows are $14,000 per...

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5. Problem 11.05 (Discounted Payback) eBook Project L costs $60,000, its expected cash inflows are $14,000 per...

5. Problem 11.05 (Discounted Payback)

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Project L costs $60,000, its expected cash inflows are $14,000 per year for 8 years, and its WACC is 13%. What is the project's discounted payback? Do not round intermediate calculations. Round your answer to two decimal places.

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Answer 1

Answer #1

CF0 = ($60,000) DISCOUNTED CASH FLOWS

CF1 = $14,000 $12389.38

CF2 = $14,000 $10964.05

CF3 = $14,000 $9702.70

CF4= $14,000 $8,586.46

CF5 = $14,000 $7598.6391

CF6 = $14,000 $6724.4594

CF7= $14,000 $5,950.849

CF8 = $14,000 $5266.2381

6 + ($60,000 - $55,965.68)/ $5,950.849

= 6 + 0.6779

= 6.68 YEARS (ROUNDED OFF TO TWO DECIMAL PLACES).

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Answer 2

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