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30 May 2019

Your project has the following cash flows:

Year Cash Flow

0 - $4,400

1 1,500

2 2,400

3 1,200

4 2,600

What is the payback period for this project?

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Trinidad Tremblay
Trinidad TremblayLv2
30 May 2019

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Related questions

The payback period for the following set of cash flows is years. (Round your answer to 2 decimal places. (e.g., 32.16))

Year Cash Flow
0 ?$4,800
1 2,600
2 1,900
3 1,600
4 2,800

Buy Coastal, Inc., imposes a payback cutoff of 3 years for its international investment projects. Suppose the company has the following two projects available. Project A has payback period of years, while project B has a payback period of years. Therefore, it should
(Click to select)
accept
reject
project A and
(Click to select)
reject
accept
project B. (Round your answers to 3 decimal places. (e.g., 32.162))

Year Cash Flow (A) Cash Flow (B)
0 ?$48,000 ?$71,000
1 27,000 9,000
2 38,000 17,000
3 18,000 35,000
4 4,000 274,000

An investment project has annual cash inflows of $7,700, $8,500, $8,600, and $9,000, and a discount rate of 7 percent. If the initial cost is $23,200, the discounted payback period for these cash flows is years. (Round your answer to 2 decimal places. (e.g., 32.16))

Consider the following projects:
Cash Flows, $
Project C0 C1 C2 C3 C4 C5
A –2,600 +2,600 0 0 0 0
B –5,200 +2,600 +2,600 +5,600 +2,600 +2,600
C –6,500 +2,600 +2,600 0 +2,600 +2,600
a-1.

If the opportunity cost of capital is 10%, what is the NPV for each project? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.)
Project NPV
A $
B $
C $
a-2. Which project(s) have a positive NPV?
Project A and Project C
Project A and Project B
Project C
Project A
Project B
Project B and Project C
b.

Calculate the payback period for each project. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Project Payback Period
A year(s)
B year(s)
C year(s)
c. Which project(s) would a firm using the payback rule accept if the cutoff period were three years?
Project A
Project A and Project B
Project B and Project C
Project C
Project A and Project C
Project B
d.

Calculate the discounted payback period for each project. (Enter 0 if the payback period cannot be calculated. Do not round intermediate calculations. Round your answers to 2 decimal places.)
Project Discounted
Payback Period
A year(s)
B year(s)
C year(s)
e.

Which project(s) would a firm using the discounted payback rule accept if the cutoff period were three years?
Project A
Project A and Project B
Project C
Project A and Project C
Project B
Project B and Project C

1. What is the payback period for the following set of cash flows?

Year Cash Flow
0 −$ 7,200
1 2,700
2 1,400
3 1,700
4 2,600
2. An investment project has annual cash inflows of $6,000, $7,100, $7,900, and $9,200, and a discount rate of 16 percent.


Required:

What is the discounted payback period for these cash flows if the initial cost is $9,500?

3. What is the IRR of the following set of cash flows?
Year Cash Flow
0 –$10,960
1 5,700
2 5,700
3 4,900

4. What is the internal rate of return on an investment with the following cash flows?

Year Cash Flow
0 –$118,000
1 44,900
2 32,500
3 48,750

5. What is the profitability index for an investment with the following cash flows given a 6 percent required return?

Year Cash Flow
0 –$21,000
1 7,700
2 10,000
3 9,400

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