Question

A specialized automatic machine costs and is expected to save ​per year while in operation. using a 99​% interest​ rate, what is the discounted payback​ period?

Answer 1

The formula for discounted payback period is DPP = -ln (1 – Ci/S) / ln (1+i), wherein C is the initial Cost, i is the interest rate, and S is the saved cash per year. Given the value of i which is 0.99, substitute the remaining value of the specialized automatic machine cost (C) and saved cash (S) per year to get the discounted payback period.