Jamieson is considering a 5-year, $250,000 project with annual cash flows of $90,000.If the company's required return is 10%, determine its discounted payback.
A)3.27
B)3.43
C)3.79
D)4.01

Question

Quizplus · Accepted Answer

The discounted payback period is the time it takes for the present value of cash flows to cover the initial investment. By discounting each $90,000 cash flow at 10% and summing them, it takes approximately 3.43 years to recover the $250,000 investment.

Jamieson Is Considering a 5-Year, $250,000 Project with Annual Cash