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damaskus [11]
2 years ago
8

Project L costs $70,000, its expected cash inflows are $16,000 per year for 8 years, and its WACC is 13%. What is the project's

discounted payback?
Business
1 answer:
Otrada [13]2 years ago
7 0

Answer:

6.89 years

Explanation:

The discounted payback period can be calculated by using the following table

Year        Cash flows                PV(13%)             Cumulative Cash flows

0               (70000)                    (70000)                           (70000)

1           16000                    14159.29                       (55840.71)

2           16000                    12530.35                      (43310.36)

3           16000                       11088.80                      (32221.56)

4           16000                        9813.10                        (22408.46)

5           16000                        8684.16                        (13724.30)

6           16000                         7685.10                       (6039.20)

7           16000                          6800.97                         761.77

8           16000                          6018.56                       6780.33

Discounted Payback = 6 years + 6039/ 6801

Discounted Payback = 6.89 years

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timurjin [86]

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variable overhead efficiency variance: Variable overhead efficiency variance aims to determine whether or not their exist savings or extra cost incurred on variable overhead as a result of workers being faster or slower that expected.

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