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An investment project costs $10,000 and has annual cash flows of $2,830 for six years. a. What is the discounted payback period if the discount rate is 0 percent

Respuesta :

Answer:

The payback period is 3.53 years.

Explanation:

The cost of investment project = $10000

The annual cash flows = $2830

Time period = 6 years

Since cost of project, annual cash flow and time period is given so we are required to calculate the discounted payback period when there is 0 % discount rate.

Payback period = Initial project cost / annual cash flow

= 10000 / 2830

=3.5335

= 3.53 years

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