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Discounted payback period

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Woodgate Inc. is considering a project that has the following after-tax operating cash flows (in millions of dollars):

Year

Project Cash Flow
0 -$300
1 125
2 75
3 200
4 100

Woodgate Inc.'s finance department has concluded that the project has a 10 percent cost of capital.

Refer to Woodgate Inc. What is the project's discounted payback period?

2.00 years
2.50 years
2.65 years
2.83 years
3.00 years

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Solution Summary

Calculates project's discounted payback period.

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