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NEW QUESTION: 1
A project has the following cash flows over the next 5 years: $1,000, $600, $300, $1,200 and $1,400.
Assume all cash flows occur at the end of a year. The project requires an initial cash outlay of $2,900. The project's cost of capital is 8%. The discounted payback period for the project equals ________.
A. 3.84 years
B. 4.36 years
C. 4.81 years
D. 4.11 years
Answer: B
Explanation:
Explanation/Reference:
Explanation:
The discounted payback period is defined as the expected number of years that would be required to recover the original investment using discounted cash flows. The discounted cash flow at the end of year N is obtained by dividing that year's cash flow by 1.08