Lloyd Enterprises has a project, which has the following cash flows:
Year Cash Flows -
0-$200,000
1 50,000
2 100,000
3 150,000
4 40,000
5 25,000
The cost of capital is 10 percent. What is the project's discounted payback?
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A. B. C. D. E.Explanation
Discounted CFCumulative CF -
0-200,000.00-200,000.00
145,454.55-154,545.45
282,644.63-71,900.82
Payback -
3112,697.22+40,796.40
427,320.54+68,116.94
515,523.03+83,639.97
Payback period = 2 years + (71,900.82/112,697.22) = 2.638 years.