Business, 14.08.2020 01:01 jsmith4184

Discounted payback period. Given the following two projects and their cash flows, LOADING..., calculate the discounted payback period with a discount rate of %, %, and %. What do you notice about the payback period as the discount rate rises? Explain this relationship. With a discount rate of %, the cash outflow for project A is:

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Answer from: isa6476

the numbers are missing, so I looked for a similar question:

Cash Flow A B

Cost $10,000 $105,000

Cash flow year 1 $3,571 $21,000

Cash flow year 2 $3,571 $10,500

Cash flow year 3 $3,571 $42,000

Cash flow year 4 $3,571 $31,500

Cash flow year 5 $3,571 $5,250

Cash flow year 6 $3,571 $0

With a discount rate of 5%, 10% & 15%

Discounted cash flows for project A:

5% 10% 15%

Cost $10,000

Cash flow year 1 $3,571 $3,401 $3,246 $3,105

Cash flow year 2 $3,571 $3,239 $2,951 $2,700

Cash flow year 3 $3,571 $3,085 $2,683 $2,348

Cash flow year 4 $3,571 $2,938 $2,439 $2,042

Cash flow year 5 $3,571 $2,798 $2,217 $1,775

Cash flow year 6 $3,571 $2,665 $2,016 $1,544

discounted payback period:

5% = 3.09 years

10% = 3.46 years

15% = 3.9 years

The higher the discount rate, the longer the discounted payback period.

Discounted cash flows for project B:

5% 10% 15%

Cost $105,000

Cash flow year 1 $21,000 $20,000 $19,091 $18,261

Cash flow year 2 $10,500 $9,524 $8,678 $7,940

Cash flow year 3 $42,000 $36,281 $31,555 $27,616

Cash flow year 4 $31,500 $25,915 $21,515 $18,010

Cash flow year 5 $5,250 $4,114 $3,260 $2,610

discounted payback period:

5% = more than 5 years, the project's NPV is negative -$9,166.37

10% = more than 5 years, the project's NPV is negative -$20,901.42

15% = more than 5 years, the project's NPV is negative -$30,563.54

Answer from: Quest

years agooo ahaha. but honestly they need to update ! : )

Answer from: Quest

What's the rest of the problem? lol

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Discounted payback period. Given the following two projects and their cash flows, LOADING..., calcul...