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The Discounted Payback Period

Yancy is considering a project which will produce cash inflows of $900 a year for 4 years. The project has a 9 percent required rate of return and an initial cost of $2,800. What is the discounted payback period?

Solution Preview

We compute the PV of each cash flow by the 9% discount rate:
PV(t) = CF / ...

Solution Summary

This solution calculates the discounted payback period based on the rate of return and initial costs.

$2.19