Answer:
Discounted payback period= 3 years 1 month
Explanation:
The discounted payback period is the estimated length of time in years it takes the present value of net cash inflow from a project to equate the net cash the initial cost  
To work out the discounted payback period, we will compute present value of the cash inflow and then determine how long it will take for the sum to be equal to the initial cost. This is done as follows:
Year     Cash flow     DF        Present value  
0           487,000 × 1          = (487,000)
1          157,000 × 1.07^(-1) = 146,729.0
2         182,000 × 1.07^(-2) = 158965.8
  
3         202,000 × 1.07^(-3) = 164,892.2
4         213,000  × 1.07^(-4) =162,496.7
Total PV for 2 years = 146729 +158965+164892= 470587.0
Balance of cash flow remaining to equal  =  487,000-470587 = 16413.0
  Discounted payback period = 3 years + 16413.0
/162,496.7 × 12 months
= 3year , 1.2months
Discounted payback period= 3 years 1 month