Question

Given a the following set of cash flows, what is the discounted payback period if the...

Given a the following set of cash flows, what is the discounted payback period if the discount rate is 5%?

CF0: -14,858

CF1: 3,533

CF2: 4,080

CF3: 9,905

CF4: 8,152

CF5: 1,988

Answer with two decimals.

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Answer #1

Ans 2.91 years

Year Project Cash Flows (i) DF@ 5% DF@ 5% (ii) PV of Project A ( (i) * (ii) ) Cumulative Cash Flow
0 -14858 1 1                           (14,858.00)              (14,858.00)
1 3533 1/((1+5%)^1) 0.952                              3,364.76              (11,493.24)
2 4080 1/((1+5%)^2) 0.907                              3,700.68                (7,792.56)
3 9905 1/((1+5%)^3) 0.864                              8,556.31                     763.75
4 8152 1/((1+5%)^4) 0.823                              6,706.67                 7,470.42
5 1988 1/((1+5%)^5) 0.784                              1,557.65                 9,028.07
NPV                              9,028.07
Discounted Payback Period = 2 years + 7792.56/8556.31
2.91 years
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